• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 1 day The United States produced more crude oil than any nation, at any time.
  • 7 days e-truck insanity
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 5 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 7 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 7 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 10 days Bankruptcy in the Industry
Oil Fund Withdrawals Suggest Extended Price Rally

Oil Fund Withdrawals Suggest Extended Price Rally

Investors are ditching the oil…

Oil Moves Down on Inventory Rise

Oil Moves Down on Inventory Rise

Crude oil prices inched lower…

North Sea Oil and Gas Firms Continue Drilling Despite Climate Goals

North Sea Oil and Gas Firms Continue Drilling Despite Climate Goals

Major North Sea oil-producing countries…

Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

More Info

Premium Content

The UAE Isn’t Ditching Oil For Renewables Just Yet

  • The UAE isn’t likely to curb its oil production in favor of renewables any time soon.
  • ADNOC worries that if other countries do not continue to invest in oil and gas, we could face energy shortages in the transition to renewables.
  • “As we embrace the energy transition and future-proof our business, we will continue to explore potential opportunities that can further unlock value, free up capital and enhance returns,” ADNOC stated of its new oil production target.

The UAE has no plans to curb its oil production in favour of renewables, with the country’s climate minister pointing to strong global demand as a driver for greater crude output. As one of the few countries with the potential to increase its oil output, the UAE is continuing to boost its production in line with demand. However, the leader of state-owned oil company ADNOC worries that if other countries do not continue to invest in oil and gas, we could face energy shortages in the transition to renewables.

In September, the United Arab Emirates (UAE), announced plans to ramp up its oil production to 5 million bpd five years earlier than planned. Abu Dhabi National Oil Company (ADNOC) had been aiming for 5 million bpdof crude production by the end of the decade. However, thanks to greater investment, ADNOC now believes it can move this target forward to 2025 to take full advantage of the rising global demand – ahead of a demand dip in response to the transition to green. 

While other oil-producing countries around the world are battling to get their production back to pre-pandemic levels, only the UAE and Saudi Arabia continue to have spare oil production capacity. The boost in production levels does not come without a cost but the UAE is hoping to sell more oil and natural gas while the price of fossil fuels remains high. Oil prices have continually broken records this year, and natural gas prices have soared in the face of global shortages, while oil-producing countries are benefitting. 

ADNOC stated of its new target, “As we embrace the energy transition and future-proof our business, we will continue to explore potential opportunities that can further unlock value, free up capital and enhance returns.” The organization has also requested that international partners in its oil fields increase their crude output by at least 10 percent. Experts believe that if ADNOC meets its 2025 goal, it could increase its target to 6 million bpd for 2030. 


In August, the UAE’s average output was 3.4 million bpd, although it blames OPEC caps on oil production for the low figure. Output could be hindered further by the most recent OPEC+ announcement stating that it will cut oil production further for fear of a drop in global demand due to economic pressures. OPEC+ will reduce production across member states by 2 million bpd starting in November. But the UAE’s Minister for Climate Change and Environment Mariam Almheiri has made it clear that As long as the world needs oil and gas, we’re going to give it to them.” 

German Chancellor Olaf Scholz’s visited the UAE in September to deepen Germany’s ties with the oil-rich country and to move further away from reliance on Russian energy. The UAE signed a deal with Germany to deliver liquefied natural gas, with its first delivery expected by the end of the year. Although many European countries are shifting away from fossil fuels to renewable alternatives, natural gas is viewed as a vital part of the energy transition. The use of a ‘cleaner’ fossil fuel will help Germany, and other European countries, meet their energy demand while developing their green energy capacity. 

While she continues to promote investment in oil and gas, Almheiri is also steadfast in her support for the development of a strong renewable industry in the UAE. She explained, “We need to be careful … because conversations are happening and it’s all about energy, but it’s really important we don’t lose context of economic growth, [and] climate as well within that.” When discussing the country’s renewable energy projects she said, “It’s not just about the production … you’ve got to look at the storage, you’ve got to look at the network, you’ve got to look at the distribution. It’s such a complex network.” She added, “It’s really important that economic growth, energy security and climate action must be worked at together.”

But not everyone’s so optimistic about the future of oil and gas. The CEO of ADNOC, Sultan al-Jaber, said in September that there was not much room to maneuver in oil markets that may be set for further disruption with minimal spare capacity. He suggested that underinvestment in fossil fuels may lead to a gap between supply and demand, while the world is only just beginning to develop its renewable energy capacity. He explained, "If people’s basic energy needs are not met, economic development slows down, and so does climate action." Jaber added, "If we under-invest in the energy system of today before the energy system of tomorrow is ready, we will only make matters worse." 

The CEO believes that spare oil capacity equates to just 2 percent of global consumption at present, a challenge that OPEC+ has highlighted several times. Without greater investment in oil and gas beyond the UAE and Saudi Arabia, this cushion is not likely to get any bigger, meaning reliance will remain heavy on the two oil-rich states as demand continues to grow. 


By Felicity Bradstock for Oilprice.com 

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Mamdouh Salameh on October 09 2022 said:
    The UAE is leading the drive for energy transition in the Arab Gulf region. It also aware that a total energy transition is an illusion and therefore the notion of net-zero emissions is equally a myth.

    The UAE is realistic enough to realize that oil and gas will continue to drive the global economy throughout the 21st century and probably far beyond. This will continue to be the situation until an alternative to oil as versatile and practicable as oil itself is discovered. This isn’t going to happen even in the next 100 years.

    As a result, the UAE will continue to produce oil at its capacity as long as there is a growing demand for it.

    The UAE leaders are aware that the single most crucial factor behind the rise of crude oil prices other than a robust demand is a fast-shrinking global spare capacity including OPEC+’s.

    Underinvestment has been on the rise since December 2019 because of the incessant pressure environmental activists have been exerting on the global oil industry to divest of its oil and gas assets and also because of the hasty policies by the EU to accelerate energy transition to renewables at the expense of fossil fuels. The global economy is paying now a crippling price for these follies and will continue to do so until underinvestment is reversed.

    Current global spare capacity including OPEC+ is estimated at less than 2.0 million barrels a day (mbd). Both Saudi Arabia and UAE are currently producing at maximum as the President of UAE Sheikh Mohammed bin Zayed al Nahayan told French President Macron.

    Moreover, UAE’s crude production has never exceeded 3.2 mbd so the talk about raising its production capacity to 5.0 mbd by 2025 is an impossibility. Enhancing capacity isn’t solely a function of investments. The age of oilfields and their depletion over the years must be taken into consideration.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News