The UAE’s oil production is expected to gradually increase over the next three years as Adnoc looks to target 5 million barrels per day (mpbd) after the country’s Opec exit, S&P Global said.
Since the UAE’s exit from Opec and Opec+, its oil production capacity increased from 3.41 mbpd, the official quota set by the organization, to now around 4.85 mbpd.
S&P Global Ratings said it assumes a gradual increase in production to 5.0 mbpd by 2029.
This would strengthen real GDP growth to 6.2 per cent on average in 2027-2029 from an estimated 2.4 per cent in 2026. It would also support fiscal and current account surpluses, which S&P expects to average 3.5 per cent of GDP and 13 per cent of GDP, respectively, during 2027-2029.
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Financial buffers support against shocks
The UAE is rated at AA/A-1+, S&P affirmed in its latest report, with strong financial buffers which has helped provide a safety cushion to external shocks.
The country recorded strong net assets, an estimated 147 per cent of GDP in 2026, which provided significant fiscal and external buffers to shocks. General government debt is very low, estimated at about 26 per cent of GDP in 2026.
The ratings agency estimates the UAE’s consolidated fiscal balance to average a surplus of 2.3 per cent over the next three years.
The credits ratings agency said it could lower the UAE’s ratings in the future should geopolitical tensions continue, which would affect the country’s key infrastructure, oil exports, or investor confidence.
However, if risks subside, it could be rated higher over the medium term, with measures to improve the effectiveness of monetary policy, such as establishing deep domestic capital markets, could also prove to be positive for a higher rating.
Gradual recovery of energy flows
Moreover, energy flows are expected to gradually recover, albeit incompletely. It will take more time for energy flows to rise to pre-war levels due to operational bottlenecks, damaged infrastructure, shipping insurance constraints, and potential lingering risk aversion.
S&P added that in its base case, it assumes continued volatility in shipping due to logistical bottlenecks (including ongoing constraints in the Strait of Hormuz) and the potential for localized clashes.
The UAE’s business-friendly government policies, leading infrastructure, low tax regime, and proactive policy stance will continue to support economic stability, S&P said.
Source: Khaleej Times