What do you guys think this means for the future?
UAE was the third biggest oil producer globally, and stepping away from OPEC could really shake things up for the organization, which was once super powerful.
They might actually help with the current oil situation since they can ramp up production without dealing with any cartel limits. Sure, they'll need to figure out new ways to get oil to other countries, but once the conflict wraps up and the Strait of Hormuz is back to normal, they could sell oil to whoever they want.
I hope it is not United States that gave UAE the advise after their recent complaint like they needed United States help or something. I do not know how this can be connected, but there is politics everywhere.
From what I know before, UAE is not the third largest oil producing country in the world. I make findings also just now and I saw UAE on the 7th.
I see UAE move is opportunistic but very logic and rational. When energy price rise up due to US-Iran-Israel conflict create window of opportunity for UAE for maximizing profit. If they still joining OPEC, UAE must follow OPEC quota production limitation which actually UAE has underutilized production capacity. By leaving OPEC, UAS can produce more, grab more market share and has absolute right to determine contract and price. What UAE do is also show that world become multipolar and each country use their maximum resources for their feterence and bargaining power, UAE doeesn't want to tied anymore with particular block and play as independent player which can sell to all side. I think from several news, oil price will be higher for a long time which will be accompanied by a spike in prices for commodities and other goods. Hormuz is only a small part of the US strategy to defend the petro dollar.
it is a very big producer in per capita numbers. meaning the domestic demand is not high so it all goes to export.
the production is much easier there than in say siberian permafrost too.
Just from reading through the article it seems like the UAE doesn't get much benefit from staying in, but OPEC generally seems to have kept the oil market fairly stable over the decades - even if it did favor the producing nations in the group over the rest of the world, that was just the perk they got from having a highly sought after commodity. I get the feeling that the UAE has been manipulated by Trump, due to the I'll advised war against Iran, who is trying to unlock some oil and the UAE actually had the ability to bypass the strait by using their eastern coastline (however undeveloped and still at risk it might be). Short term it might increase supply slightly, but we are still way under what was coming out of the middle East before this terribly stupid war began.
They keep it stable because they have total control of it. So it's really hard to imagine that all of a sudden a member country who has been a founding father nation, suddenly doesn't want to be inside of this cartel. For the record, US is not a member of OPEC if I'm not mistaken. But perhaps they have a broader influence on member countries like Saudi.
So this could be a good case study of what politics or influence of the US with UAE. Again, we might be just speculating that the US might have something to do with it. But UAE is too big to be influence by them so it's very surprising to see them wanting to produce more barrels of oil than what OPEC sets. And most likely this is the reason why they decided to get out.
No doubt that politics is everywhere, but what connects it is called geopolitical affairs, and this is why politics is now more about international business affairs to get international attention. Well, apart from this, I am just shocked to see the UAE is at No. 7th and still the strongest country in the Middle East if we look at its economy, and at the same time, if we talk about Iran, which is a totally default country and still surviving. According to my best knowledge, Iran holds a bigger oil supply among all the Middle Eastern countries, and international sanctions on the water treaty are making Iran to grow its econmy harder.
This is the reason why No 1st oil supply holder country is still a default country. I sometimes wonder what if the US and international sanctions are removed from Iran, then the Iranian economy will boost faster because they will become easily able to sell their oil reserves to every country internationally and legally. Well, this is my point of view on this, CMIIW! And what do you think about this?
They have their military bases there so that possibility can't be gone and that's what other rumors have been said all about.
Anyway, it seems that politics are everywhere and whichever these countries can see that they'll benefit a lot, that's where they'll go and what will do.
In all of it, we can always conclude that whenever there's politics then there is also business.
As a member of the OPEC nations are bound by the general decision. They would have to supply within the oil qouta that was agreed by the organisation. Meanwhile, countries like the UAE have the capacity to produce more since they have invested so much on the oil and gas sector. Withdrawal from the organization would give the UAE the flexibility they need to supply as much oil as it can to the global market.
I am seeing this as the beginning of the end of the sixty-something-year alliance. The organisation might lose some level of influence. I think the US might have engineered this move. Donald Trump has been a critic of OPEC. He thinks the organisation is holding the oil market to ransom.
It is clear that UAE wants autonomy of their oil that is why they are pulling out of OPEC which as I know is a voluntary organization for oil producing countries, if something is no longer favorable for a party and they feel like they are no longer getting values then you cannot blame them for withdrawing.
Their withdrawal might set the pace for other member nations to take the same step, if care is not taken it might be the beginning of the end of the organization which has been a strong body for oil producers. Perhaps UAE is looking for innovations and business strategies which if they remain in OPEC they cannot achieve it. We have to wait and see how far they will go on their own without an OPEC backup, the result might determine if other members will take their step or choose to remain in OPEC.
Big if true.
Another brick leaves the wall and soon the wall (the USD) will turn into a house of cards...
USA has 2 options at this point.
1- Accept the new world order and acknowledge China is numero uno
2- Start a global war and nuke evrybodie.
Chiiiiinaaaa
this has nothing to do with USD, let alone abandoning USD.
leaving OPEC means they won't have to cap oil production. they will still trade it in USD. in fact, in even larger quantities.
They sure will be because of how huge the deposits of oil they have, it will be a free market to them and that will bring them in billions of money. And from that profit, they'll be able to build more infrastructure that shall help them supply more oils in a daily basis just like its neighboring oil suppliers.
I agree, we're all speculating and I think we'll see how it goes for UAE if there's some deal they did with the US for them to opt out of OPEC. Few days left until they're officially withdrawn.
The UAE is simply making this move to maximize its own return on investment on major bigger investments and it's going to be an issue if the market price isn't stable for sure.
The UAE would aim to do business directly with China, India, Japan without any permission from the cartel of course, thus making them more attractive and flexible if things go as planned.
At this point in global affairs and with what is currently going on at the middle east , I was not surprised seeing this type of news because anything is possible. From what I can see there is a growing discord among even the arad league. Every arad country at this moment is just trying to protect her interests because, the war going on in the middle is has the capacity to reshaping the future of the middle east.
This war and the eventual blockage of the strait of Hormuz by Iran and the counter blockage that even the united states of America has mounted on the strait of Hormuz which has brought a global scarcity of petroleum products. Has taught many countries to be more careful and take a critical look at organizations like opec and have a rethink.
UAE is now open to make their own decision of how much oil they can sell as they have decided to leave OPEC that is a huge deal they don't need to follow the rules to sell oil anymore. As we have seen that from the past many years OPEC has strict rules and regulations by limiting the production of the oil and they have kept the prices too high where as United Arab Emirates has now the capability to increase the capacity and they want to sell more oil to boost up their economy.
As they have decided to leave for OPEC now they can pump as much oil as they can, this will definitely lower the prices for the rest of the world and after this they will be the stronger leaders in the global energy market for the long period of time.
Now they will be independent and more flexible in the global market.
At many times, the UAE demanded an increase in its baseline quota oil production but the OPEC refuses in the order to maintain a stable fair market for all state members. And despite all the expectations about the UAE to leave the organization because of its demand denial every time, the UAE stayed as an OPEC member which confirms that it prefered to work from inside the organization with the intention to achieve a balance between its national interests and the global market policies.
With the ongoing war, it seems that the UAE realized that the OPEC and maintaining a favorable global market climate might not be always serving national interest. With more countries decide to follow UAE, we can talk about considerable consequences.
Lol, what has this got to do with the USD, or even the United States. The UAE are tired of the constraints that come with being a member of OPEC and they are leaving to allow better flexibility, in both their production and global supply. They never announced trading in USD would cease and be replaced by the Chinese Yuan, so i wonder how you're foreseeing a global war in this.
Russia is a temporary member of OPEC+(*), and China is one of the UAE's largest oil importers. The US is neither an active member of the alliance nor a major importer. I doubt this action will actually harm the US, but rather the opposite. But I don't know if the US was heavily involved when the alliance was initially formed.
*) https://en.wikipedia.org/wiki/OPEC