UAE Oil Sector Set for 7.8% Growth in 2025

UAE Oil Sector Set for 7.8% Growth in 2025 Amid OPEC+ Cuts Easing

UAE Oil Sector Set for Strong 7.8% Growth in 2025 Amid OPEC+ Policy Shift
The oil sector in the United Arab Emirates (UAE) is expected to rebound with significant growth of 7.8% in 2025, driven by the gradual lifting of OPEC+ production cuts starting in December 2024. This recovery marks a turnaround for one of OPEC’s largest producers, according to the National Bank of Kuwait’s (NBK) latest macroeconomic outlook.

2025: A Year of Recovery for UAE’s Oil Economy
The UAE’s oil economy, which has seen only modest growth of 0.4% this year, is poised for a strong rebound as OPEC+ unwinds its restrictions on oil output.
NBK forecasts that by the end of 2025, oil production in the UAE will reach 3.4 million barrels per day (bpd). This would mark a notable increase from September 2024, when the UAE’s crude oil production averaged 2.958 million bpd, down slightly by 6,000 bpd from the previous month.

The Aspiring Expansion Plans of ADNOC
MEED believes that the Abu Dhabi National Oil Company (ADNOC) and its partners are moving forward with significant upstream oil and gas projects worth $30 billion. The UAE is on track to meet its long-term production goal of 5 million barrels per day by 2026, one year ahead of schedule, thanks to this robust development.
Earlier in 2024, ADNOC successfully increased capacity at one of its offshore fields by 25% using artificial intelligence, reflecting the company’s commitment to leveraging advanced technologies to enhance efficiency and output.

As of May 2024, the UAE announced that its production capacity had already reached 4.85 million bpd, an increase from 4.65 million bpd at the end of 2023. This strategic push underscores the nation’s intent to secure its position as a leading energy producer and meet growing global demand.

Broader Economic Outlook
The growth in the UAE’s oil sector will contribute to an overall acceleration of the national economy. NBK projects the UAE’s total economic growth will rise to 5.1% in 2025, compared to the 3.3% growth expected for 2024. This strong economic performance is supported by the UAE government’s prudent fiscal management and strategic investments in various sectors.

While the government’s fiscal position remains stable compared to other Gulf Cooperation Council (GCC) countries, NBK notes that high public spending and anticipated lower oil prices over the forecast period could reduce the fiscal surplus. The surplus is forecast to narrow from 3.1% of GDP in 2024 to just 1% by 2025.

The UAE’s oil sector is positioned for a strong recovery in 2025, thanks to the easing of OPEC+ production cuts and ambitious expansion projects led by ADNOC. As production ramps up to meet future targets, the sector will play a pivotal role in driving the UAE’s overall economic growth. Despite narrowing fiscal surpluses, the UAE’s robust financial management ensures it remains on a stable trajectory, with continued investments in energy production and economic diversification.