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UAE to leave OPEC

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Re: UAE to leave OPEC

#181

Post by eightysixfour »

Havoc wrote: post #163
eightysixfour wrote: post #156

Earlier quoted context omitted.

> 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...

Indeed it’s leverage but at same time they only need the swap because all is not well in petrodollar land.

I don't think there is any evidence that they actually need the dollar swap line - the dirham-dollar peg isn't at any risk and they have plenty of money for fiscal flexibility going into the foreseeable future. If you take financial reasons off of the table then it is clear it is just a political play for a bigger seat at the table with the US.

The Saudis did it to Biden in 2023, the UAE sees the opportunity to do it to Trump now.

Re: UAE to leave OPEC

#182

Post by techblueberry »

cogman10 wrote: post #104

> The UAE's exit from OPEC represents a win for U.S. President Donald Trump, who in a 2018 address to the U.N. General Assembly accused the organisation of "ripping off the rest of the world" by inflating oil prices. I can't see how it is actually a win for Trump. OPEC has mostly been a big partner with the US. They are the ones that have mandated using the dollar as the baseline currency for buying and selling OPEC…

> I can't see how it is actually a win for Trump. OPEC has mostly been a big partner with the US.

I mean, I don’t even know if I mean this sarcastically anymore, but are we sure that Trump and the US’ interests are aligned? I think something can be a win for Trump and a loss for the USA.

Re: UAE to leave OPEC

#183

Post by gnfargbl »

iLemming wrote: post #138

"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, and my grandson is going to ride a camel". Sheikh Rashid bin Saeed Al Maktoum, the former Emir of Dubai.

Where is the Land Rover supposed to sit on this scale?

There are current Land Rovers with market positioning suggesting they're "better" than Mercedes, and there are historic Land Rovers which were arguably not much better than camels.

Re: UAE to leave OPEC

#184

Post by philistine »

ceejayoz wrote: post #141
trollbridge wrote: post #115

Earlier quoted context omitted.

This is to a large part to give Egypt plausible deniability. They don’t want to deal with Gaza, refugees, or a humanitarian crisis, but also don’t want the political fallout of taking action like the Israelis do.

Eh, 50/50. Israel would not respond positively to Egypt throwing the gates wide open.

That is very reductive of the whole situation. The Egyptians are not singularly focused on helping Palestinians; it is far more nuanced than that.

Bottom line, Egyptians are not interested in supporting millions of refugees inside their border. So the border stays closed to mass immigration.

Re: UAE to leave OPEC

#185

Post by bluGill »

RobRivera wrote: post #171
iLemming wrote: post #138

"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, and my grandson is going to ride a camel". Sheikh Rashid bin Saeed Al Maktoum, the former Emir of Dubai.

Its a fun line, but the volume of money they have and the way its managed says they are looking at retaining that wealth somehow

Money retrained means nothing when cheap oil is gone. Cars are only a thing because we have volumes and energy for large supply chains and scale. A rich person can afford a model-T level car, but large parts of what makes a luxury car are things that they won't be able to get at any price without modern industry that is built on distributed wealth for many people. All the electronics - needs industry. Precision manufacturing - depends on precision electronics. You can't even rebuild a current design if someone thinks to print out the blueprints.

Of course who knows how to end of oil will happen. Best case is a switch to renewables (or fission...) in which case there will be more than enough expensive oil for a few rich people to drive expensive gas cars if they want to. There are lots of other options as well, only time will tell.

(and a nod here to the replies who suggest this was never actually said)

Re: UAE to leave OPEC

#186

Post by pixl97 »

ceejayoz wrote: post #141
trollbridge wrote: post #115

Earlier quoted context omitted.

This is to a large part to give Egypt plausible deniability. They don’t want to deal with Gaza, refugees, or a humanitarian crisis, but also don’t want the political fallout of taking action like the Israelis do.

Eh, 50/50. Israel would not respond positively to Egypt throwing the gates wide open.

At the same time, neither would Egypt. Refugee crisises are messy.

Re: UAE to leave OPEC

#188

Post by FridayoLeary »

jmyeet wrote: post #103
woodruffw wrote: post #53

Serious question: what is OPEC’s influence in 2026? Most analyses I’ve read suggest that it’s essentially a defunct organization and has been since the 1980s, due to (1) a lack of geopolitical agreement between members, and (2) a lack of punishment/compensatory mechanisms for when individual members cheat on their commitments.

It's a good question. Let me answer the question this way: OPEC is the biggest single factor for the inflation shock of 2020 to 2022 yet weirdly hardly anybody talks about it. Let's rewind to March 2020 and the start of the pandemic. For a very brief period, April oil futures went negative . Technically, this was an extreme contango market. Oil producers were running out of places to store oil and nobody was buying.…

You have another thing which is that MBS (correctly) felt comfortable ignoring Biden. If he'd slighted Trump in that way it would probably take 2 private jets to undo the damage.

Re: UAE to leave OPEC

#189

Post by tootie »

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…

Global pricing affects all fossil fuels and always will. Energy independence will remain a fantasy until we are fully on renewables. Which is entirely within reach and requires fighting zero wars.

Re: UAE to leave OPEC

#190

Post by BobaFloutist »

woodruffw wrote: post #119
aprilthird2021 wrote: post #111

Earlier quoted context omitted.

People don't forget it. But Egypt is a dictatorship aligned with US/Israel, so there's again not much we can do there. Ending foreign aid to Egypt is probably very aligned with ending foreign aid to Israel in terms of popularity among American voters

> Ending foreign aid to Egypt is probably very aligned with ending foreign aid to Israel in terms of popularity among American voters I strongly suspect the average American has absolutely zero sense of how much foreign aid we give Egypt. That's not to contradict your point directly, just that it isn't a very salient part of American politics (unlike Israeli foreign aid).

> it isn't a very salient part of American politics (unlike Israeli foreign aid).

I feel like Israeli aid, while vastly more salient than it used to be, is still mostly salient as a left-of-center wedge issue, otherwise being about as salient as your average major foreign policy issue - ranking just under the least salient domestic policy issue, which ranks just under the most minor personal quality of any candidate, which ranks under the current state of the economy, which ranks under the current perceived state of the economy. Wow, that's way too many times to use "salient" in one sentence.

And for the record, I'm not arguing about how much people should care, just how much they do.

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