For the UAE, freedom to tap into its substantial spare production capacity remains tantalizingly just out of reach. Last month’s agreement to participate in additional voluntary Opec+ production cuts in Q1 2024 has nixed the UAE’s plans to increase production by 200,000 b/d in January. Beyond this, even were Opec+ to agree to begin phasing out cuts from April – far from a foregone conclusion – this tapering is likely to only be gradual, meaning that even in a best-case scenario the UAE’s output upside for 2024 will be severely capped.

Production is on course to average 2.94mn b/d this year, with the UAE’s current Opec+ ‘Required Production’ level stuck at 2.875mn b/d. This had been set to increase to 3.075mn b/d in January, but the new voluntary cuts mean that it will increase to just 2.912mn b/d for Q1. Even if the cuts begin to taper in April, UAE production would be on course to average just 3.014mn b/d for 2024 (see chart 1). The longer the cuts remain in place for, the greater the likelihood that annual production averages less than 3mn b/d. (CONTINUED - 961 WORDS)