The Decline of Iran and the Steady Rise of the UAE

Iran and the United Arab Emirates have been constant regional rivals in recent history, engaging in territorial disputes over islands in the Persian Gulf and racing to become proficient nuclear power generators. The latter competition has already been won by the UAE, as Iran Open Data previously reported.

The UAE’s notable progress since the country’s foundation 50 years is most commonl;y associated with the skyscrapers of Dubai. The less-known success story is the UAE’s steadily rising  oil production (see Figure 1). 

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Iran became a world leader in oil production in the 1970s. By 1974, one in every five barrels produced in the world was from Iran. That year, Iran’s oil production was almost 4 times higher than that of the UAE.  

By 2022, the picture is different . The UAE’s oil production exceeded Iran’s by over 5%, although Iran’s oil reserves are 60% higher than those of the UAE. The UAE’s steady progress has been facilitated by international oil companies, its ability to attract the latest technologies and its reputation as a politically stable,  reliable partner for global oil & gas consumers. Even the relatively small Emirate of Fujairah has grown in the past decade to become the third largest fuel oil bunkering hub for the global shipping industry. 

In the meantime, Iran has limped along, impeded by a revolution, war, sanctions and the resulting absence of global technology providers or investors. Figure 2 shows that the UAE was only providing around 5% of global oil supplies in 1974 and has now raised that to 13%.

 

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Iran’s oil supply accounted for around 20% of global demand in 1974. This has dropped to 12% in 2022, illustrating the decline of Iran’s global presence.