Author: Yousef Saba and Florence Tan
March 16 (Reuters) – Daily oil production in the United Arab Emirates has fallen by more than half as the conflict with Iran and the effective closure of the Strait of Hormuz forced state oil giant Abu Dhabi National Oil Co (ADNOC) to impose widespread production shutdowns, two sources told Reuters.
The halt to commercial sailings at key maritime chokepoints normally used to transport about a fifth of the world’s oil supplies has wreaked havoc on global energy markets.
Earlier on Monday, Abu Dhabi National Oil Co. suspended oil loading operations at the port of Fujairah, the UAE’s main bunkering and storage hub, due to drone attacks. Operations had just resumed on Sunday following another attack over the weekend.
The UAE, the group’s third-largest producer, produced just under 3.4 million barrels per day in January, accounting for more than 3% of global demand, according to secondary sources reporting to OPEC.
Oil production in the Middle East generally halted
The shutdowns, the temporary closure of oil wells, affected both onshore and offshore production, two people familiar with the matter said. They asked not to be named due to the sensitivity of the matter.
Abu Dhabi National Oil Co. has said it is cutting offshore production, with sources saying all offshore production is now shut.
Kpler offshore production data shows that before the war, ADNOC exported just over 1 million barrels per day of Upper Zakum crude, just under 700,000 barrels per day of Das Blend, and about 230,000 barrels per day from the Umm Lulu field.
Onshore Murban crude oil exports jumped to about 1.5 million barrels per day in February from 1.135 million barrels per day in January, Kpler data showed.
According to Reuters, OPEC’s largest oil producer Saudi Arabia has cut production by about 20%. Iraq, OPEC’s second largest member, has cut production by about 70%. Analysts estimate that total oil production in the Middle East is currently cut by 7 million to 10 million barrels per day, accounting for 7% to 10% of global demand.
(Reporting by Yousef Saba and Florence Tan; Editing by Joe Barwell)
