Global Supply Shifts, Price Risks Emerge from Mid-East Crisis

The United Arab Emirates has restored its crude oil exports to pre-crisis levels, shipping more oil out of the Strait of Hormuz than any other Gulf producer in June and July despite a blockade, according to vessel-tracking data compiled by Bloomberg and reported by OilPrice.com. The UAE, which left OPEC on May 1, achieved a record production of 4.1 million barrels per day in June by using workarounds like shipping in "dark mode," maximizing an onshore pipeline, and loading crude outside the chokepoint at Fujairah.

Meanwhile, Nigeria is positioning to capitalize on global supply shifts, expecting to attract $30 to $50 billion in investment for 22 offshore oil and gas projects over the next five years, its Upstream Petroleum Regulatory Commission said. The country's crude production rose to 1.56 million bpd in June, its highest since April 2020, and it aims to reach 2 million bpd in the near term, according to OilPrice.com.

In Europe, a separate energy crisis is brewing as natural gas storage sites were only 57% full as of August 5, the lowest level for this time of year since 2011. According to Gas Infrastructure Europe data cited by OilPrice.com, this is well below the nearly 70% storage level seen last year and risks missing the EU's winter target of 80% full by December. Analysts warn the thin cushion leaves prices vulnerable to violent spikes this winter.

The UAE's export resilience stems from tactical adaptations. State firm ADNOC has issued an unprecedented number of tenders since June, offering millions of barrels for loading from ports inside the Persian Gulf and at Fujairah outside it, or via ship-to-ship transfers offshore Fujairah or Malaysia. The International Energy Agency estimates the UAE's output jumped from 3.3 million bpd in May to 4.1 million bpd in June following its OPEC exit.

Nigeria's production boost comes as non-Middle Eastern OPEC members have gained leeway to raise output to make up for disrupted Persian Gulf supply. The country's total crude and condensate production rose for a fourth month to 1.735 million bpd in June and exceeded 1.8 million bpd in July.

The European gas shortage is directly tied to the Middle East conflict, which tightened global LNG markets and sent prices soaring, allowing Asia to outbid Europe for spot cargoes. Wood Mackenzie analysts warned that low inventories, strong Asian demand, and limited new LNG supply "almost guarantee elevated prices through this winter and into 2027."

For Bakken operators, these global developments underscore a market adapting to sustained disruption in a key chokepoint, potentially supporting oil prices as competitors like the UAE and Nigeria work to fill gaps. However, the looming volatility in global gas markets could also influence associated gas economics and broader energy price correlations in the Williston Basin.