UAE Oil Exports Recover to 85% of Pre-War Levels, IEA Says
UAE oil exports rebounded to nearly 85% of pre-war levels in early June, driven by alternative routes and storage, even before a US-Iran peace deal, according to the IEA.
Oil exports from the United Arab Emirates recovered to nearly 85% of pre-war levels in early June, according to a report from the International Energy Agency. The rebound occurred even before Washington and Tehran signed an interim peace deal, as the Gulf nation leveraged pipelines, storage facilities and alternate shipping routes to bypass disruptions caused by the Iran war. This recovery was facilitated by the UAE's access to the Habshan-Fujairah pipeline, which can bypass the Strait of Hormuz, and its strategic storage at Fujairah, allowing for flexible loading schedules. The IEA noted that exports reached approximately 2.5 million barrels per day, up from a low of 1.8 million bpd during the peak of the conflict, as tanker rates and insurance costs normalized.
The rapid recovery in UAE exports is a significant development for global oil markets, as it eases supply concerns that have kept prices elevated. The ability to reroute flows through existing infrastructure demonstrates the resilience of Middle Eastern supply chains. For energy traders, this rebound reduces the risk of a prolonged supply gap, potentially weighing on crude prices in the near term. NowPrice's real-time fuel quotes show Brent crude trading near $78 per barrel, reflecting the market's reassessment of supply risks. The Brent-WTI spread has narrowed to $4.50, indicating easing global tightness, while US Strategic Petroleum Reserve levels remain at 370 million barrels, providing a buffer. Crack spreads for gasoline have softened as refinery margins adjust to improved feedstock availability, and China's marginal demand for crude has held steady amid mixed economic data. OPEC+ spare capacity, estimated at 4 million bpd, remains a key backstop, though Saudi-Russia coordination on output quotas continues to influence market sentiment.
Looking ahead, traders will monitor whether the UAE can sustain or increase these export levels as the interim peace deal takes effect. The IEA report also highlights the importance of strategic storage and pipeline capacity in mitigating geopolitical shocks. Further data on OPEC+ production and global demand will be key to gauging the trajectory of oil prices in the coming weeks. Market participants will watch for signs of contango or backwardation in the futures curve, as well as any shifts in Saudi and Russian output targets at the next OPEC+ meeting. The UAE's ability to maintain export flows could cap price rallies, but renewed tensions or supply disruptions elsewhere may reintroduce volatility.