Research Report; Comparison of Iran's Oil Production with a Regional Competitor: Iran's Decline, UAE's Rise

Iran and the United Arab Emirates have a long history of regional rivalry, from disputed islands in the Persian Gulf to competition in nuclear energy production. However, in terms of oil production, the UAE, which was significantly behind Iran half a century ago, has been keeping pace with Iran in recent years. Iran ranks fourth globally in oil production, while the UAE ranks tenth. In terms of oil exports, the UAE stands fifth after Iran. According to the 'Open Data Portal of Iran', since its establishment 50 years ago, the UAE has steadily increased its oil production and exports alongside other advancements. Iran was a leader in oil production in the 1970s. For instance, in 1974, one out of every five barrels of oil produced in the world was from Iran. In fact, that year, Iran's oil production was nearly four times greater than that of the UAE. However, after half a century, UAE's oil production has surpassed Iran's by more than 5%, even though Iran's oil reserves are 60% greater than those of the UAE. The UAE's continuous progress, by inviting international oil companies and attracting the latest technologies without media controversies, has made it a reliable partner for global oil and gas consumers. Even the relatively small city of 'Fujairah' has become the third-largest hub for bunker oil for the global shipping industry in the past decade. Meanwhile, Iran has faced numerous challenges in oil production due to the revolution, war, sanctions, the absence of foreign investors, and lack of global technology. The above chart shows that the UAE's oil production has increased from 5% in 1974 to 13% in 2022. In contrast, Iran's global oil supply dropped from about 20% in 1974 to 12% in 2022. This indicates a decrease in Iran's global presence in the oil market.