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One of the biggest oil exporters in the Middle East, the United Arab Emirates, is set to increase from 2024 the exports of its flagship Murban crude grade as the UAE will see its production quota in the OPEC+ deal increased, traders have told Reuters.
Refinery maintenance in the UAE in early 2024 is also set to release more Murban barrels for exports, according to the traders and Reuters data.
The higher availability of Murban next year is weighing down on the crude grade’s spot prices and will further raise the global supply of light sweet crudes. The volume of other similar grades from Brazil and the United States is also set to increase amid record-high U.S. crude oil production and rising output from Brazil.
Due to the higher expected Murban volumes on the global market next year, the spot premium for Abu Dhabi’s flagship crude grade loading in January 2024 fell this week to the lowest in six months.
According to Reuters data, the spot premium of Murban over the Dubai benchmark was as low as $1.40 per barrel on Thursday.
The UAE could raise its oil output next year as it has won a higher quota under the OPEC+ agreement.
The UAE, OPEC’s third-biggest producer after Saudi Arabia and Iraq, said in the summer that it would not join the Saudis in making voluntary production cuts.
The UAE has argued for years that it should be allowed to pump more than its current OPEC+ quota as it is raising its production capacity.
At the June meeting, the UAE got a huge concession from OPEC+ in the form of an upward revision of its quota that will take its production up by 200,000 barrels per day (bpd) to 3.219 million bpd for 2024.
A rise in the UAE’s oil production next year doesn’t necessarily mean that the OPEC+ group would be pumping more—some members such as Angola are underperforming compared to their already lowered quotas.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.