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UAE to leave OPEC

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Re: UAE to leave OPEC

#151

Post by ch4s3 »

cmiles8 wrote: post #132

The US has long sought to erode OPEC’s ability to dictate global oil prices. The US has made massive progress in being broadly energy independent to isolate it from challenges elsewhere. The US has been a net energy exporter since 2019. Global oil pricing was always an annoying thorn in that strategy. This is an initial but big crack in shaking up global oil markets in a way that meaningfully shifts global power dyna…

I think the initial crack was ousting Maduro in Venezuela. Since OPEC exempts Venezuela from production caps, it gives the US government a lever on non US production.

Re: UAE to leave OPEC

#152

Post by ndiddy »

jmyeet wrote: post #34

To anyone wondering, yes this is a consequence of the War in Iran but what this means isn't exactly clear. Or rather the consequences aren't clear. For a super brief background, the US has what's been called an oil-for-security deal with Saudi Arabia since 1945. The US supports the Saudi royal family and Saudi Arabia keeps the oil flowing, which has largely been the case (other than 1973). Saudi Arabia remains the "b…

> Short-term this smells like the US is either behind this break or at least approves of it. The idea is probably for the UAE to increase production in an effort to stabilize oil prices. This administration has also shown a complete disregard for historic alliances (including NATO) and they probably view OPEC as a cartel they want to break up.

I've seen reporting over the past week or so regarding the US potentially bailing out the UAE to make up for the financial harm and damage it's suffered due to the US-Iran war. How likely do you think it is that the UAE leaving OPEC is a condition for that financial assistance?

Re: UAE to leave OPEC

#153

Post by tamimio »

dueltmp_yufsy wrote: post #97

Ok I was initially thinking this would be good for oil prices since they are leaving a cartel, but the article is saying this will just create more uncertainty. Seems we are damned if we do, damned if we don't these days.

Since covid, either way and whatever the event is, it will always be used to increase the prices on consumer’s goods: war, tweets, a giraffe died in Nairobi, it doesn’t matter, prices will go up and never down! It won’t stop unless people, the normal average people, go out in streets rioting against that.

Re: UAE to leave OPEC

#154

Post by energy123 »

tialaramex wrote: post #99
cj wrote: post #29

Earlier quoted context omitted.

My understanding is basically that OPEC is similar to a workers union. Countries band together and set terms that dictate the price and the supply available in the market. UAE leaving OPEC is like breaking up a workers union. UAE is no longer required to restrict how much oil it exports, and also doesn't have to set a price floor. They're allowed to sell more oil cheaper, potentially at the expense of neighboring OPE…

Ordinarily a Cartel is illegal. If say the US breakfast cereal manufacturers decided to all agree they'll charge a minimum $20 per kilogram, no bulk discounts, the government can and likely will (assuming they don't remember to bribe Donald Trump) prosecute them and force them to stop doing that. If you've been involved in an SDO ("Standards Development Organisation" think ISO or the IETF although the IETF would insi…

Breakfast cereal has substitutes so it would be unprofitable to do that. But the meaning behind what you're saying was clear nonetheless.

Re: UAE to leave OPEC

#156

Post by eightysixfour »

Havoc wrote: post #120
netdur wrote: post #109

Geopolic: A US-aligned Gulf state walking away from a Saudi/Russia-led bloc in the middle of a war, after deciding the bloc didn’t really have its back Economic: it weakens OPEC’s pricing power in a way you might not see right away if Hormuz is closed, but it could really change the supply picture once things reopen

UAE announced this week they might start selling oil in yuan so this doesn’t read like anything US aligned to me. If anything it reads like the opposite to me - a move away from traditional opec petrodollar system

> UAE announced this week they might start selling oil in yuan

That is just UAE pressure to make sure they get their dollar swap deal: https://www.reuters.com/world/middle-east/trump-says-currenc...

Re: UAE to leave OPEC

#157

Post by nashashmi »

Iran lets oil traded in Yuan to navigate the Strait. OPEC sets prices in Petrodollars. What is the point of staying in OPEC then? Qatar is not part of OPEC so they were able to trade freely in Yuan.

Re: UAE to leave OPEC

#158

Post by nradov »

boringg wrote: post #59
pjc50 wrote: post #42

Earlier quoted context omitted.

Someone's going to have to provide me with an explainer of how many different proxy forces are involved in Yemen. I can barely keep up with Lebanon and have forgotten Syria.

Best of luck! These proxy wars have existed since the days of Assyria. 3000 years and running. Kind of depressing thought actually.

[dead]

Re: UAE to leave OPEC

#160

Post by MattDamonSpace »

Havoc wrote: post #120
netdur wrote: post #109

Geopolic: A US-aligned Gulf state walking away from a Saudi/Russia-led bloc in the middle of a war, after deciding the bloc didn’t really have its back Economic: it weakens OPEC’s pricing power in a way you might not see right away if Hormuz is closed, but it could really change the supply picture once things reopen

UAE announced this week they might start selling oil in yuan so this doesn’t read like anything US aligned to me. If anything it reads like the opposite to me - a move away from traditional opec petrodollar system

“Might” and either way breaking OPEC is good for the West, regardless of their intent

defecting from the cartel, a tale as old as time

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