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UAE to leave OPEC

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Re: UAE to leave OPEC

#221

Post by api »

bluGill wrote: post #177

OPEC has long been Saudi Arabia reducing output, and everyone else selling everything they can. They haven't had much power since the 1970s, but that they exist means they are a threat that if everyone else actually stuck to the agreement for a change. This is the common problem for cartels: everyone has inventive to cheat on the deals made. By selling a little more than your share you get more money, while because e…

Tangent but: this is also why reducing greenhouse gas emissions is hard.

As long as fossil fuels remain one of the cheapest easiest to scale ways to make power, there’s a similar incentive to cheat. If everyone else cuts emissions and you don’t, your margins are higher and you can undercut them. Global reductions require an all-cooperate scenario.

Developing nations have the strongest incentive to cheat since they need those margins to catch up.

Which is why I think little progress will be made until other sources are actually cheaper. Until then it’s beyond us politically. We can’t get all nations across the world to simultaneously cooperate at that scale.

Re: UAE to leave OPEC

#222

Post by watwut »

bluGill wrote: post #177

OPEC has long been Saudi Arabia reducing output, and everyone else selling everything they can. They haven't had much power since the 1970s, but that they exist means they are a threat that if everyone else actually stuck to the agreement for a change. This is the common problem for cartels: everyone has inventive to cheat on the deals made. By selling a little more than your share you get more money, while because e…

Saudi are staying and UAE is leaving because they want to pump more.

Re: UAE to leave OPEC

#224

Post by 0xbadcafebee »

This is the US trying to salvage the petrodollar. They want those t-bills and oil priced in dollars to maintain reserve currency status, but the whole world is divesting anyway. UAE is hoping that by leaving OPEC they can continue to do business and get protection from US. But US isn't gonna risk a larger war just to defend UAE, US has plenty of oil to exploit in Venezuela and at home. So UAE is just kinda screwed, and petrodollar will become north-american-petrodollar. My guess is it'll happen by Q1 2027

Re: UAE to leave OPEC

#225

Post by tootie »

nine_k wrote: post #195
tootie wrote: post #189

Earlier quoted context omitted.

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.

The US, or Saudi Arabia, or Venezuela, or Russia could very well be energy independent on fossil fuels alone, even though that won't be wise. Europe, or China, or India could not though.

How? Being a net exporter implies we make more than we use. Great. How do we force companies to not export until domestic demand is met? And how do we ensure that doesn't raise prices more than just running the system as-is?

Re: UAE to leave OPEC

#226

Post by chasd00 »

WarmWash wrote: post #75
cj wrote: post #49

Earlier quoted context omitted.

> Without a healty cartel, oil is doomed Why/how? Without a healthy cartel, wouldn't prices go down? Cheaper oil means less adoption of alternate energy sources.

The goal of the cartel was to stabilize prices right in the sweet spot to keep the world addicted. Too low and players start losing money, too high and people switch away from oil, too much volatility, and people switch away from oil.

> The goal of the cartel was to stabilize prices right in the sweet spot to keep the world addicted.

If the price of oil remains low the gulf governments can't fund their social programs and risk instability. That may not be the only reason for OPEC but it's a major one.

When fracking really took off the writing was on the wall and I think many OPEC nations have since taken serious measures to shield themselves from price drops. This is probably why the UAE can now feasibly leave OPEC. I thought the fracking boom was the end of OPEC but they managed to hang on.

Re: UAE to leave OPEC

#227

Post by vel0city »

energy123 wrote: post #154
tialaramex wrote: post #99

Earlier quoted context omitted.

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.

There is no substitute, gotta have my pops.

Re: UAE to leave OPEC

#228

Post by tootie »

glitchc wrote: post #214
tootie wrote: post #189

Earlier quoted context omitted.

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.

It's the other way around: Renewables will remain a fantasy until we achieve energy independence.

That makes no sense at all. We just had a post about several countries with energy independence who had done it with zero extractable resources. For them, the magic key was having tons of hydro and a small population. They just stopped importing. Countries like the US will need a lot more power and a lot more diversity of generation but it can be done if there was enough will to do it.

Re: UAE to leave OPEC

#229

Post by ndisn »

post-it wrote: post #212
nradov wrote: post #180

Earlier quoted context omitted.

CAFE standards were always a stupid idea. If we want to reduce fuel usage then increase the tax on fuel instead of punishing manufacturers for selling vehicles that consumers want to buy.

This is, respectfully, corporate propaganda. Consumers buy the vehicles that are available and advertised. It's in the best interest of manufacturers to convince/compel consumers to buy larger, more expensive vehicles with higher margins, and that's exactly what they're doing.

You can’t convince (almost all) consumers to spend money on something that they do not want.

Re: UAE to leave OPEC

#230

Post by nradov »

post-it wrote: post #212
nradov wrote: post #180

Earlier quoted context omitted.

CAFE standards were always a stupid idea. If we want to reduce fuel usage then increase the tax on fuel instead of punishing manufacturers for selling vehicles that consumers want to buy.

This is, respectfully, corporate propaganda. Consumers buy the vehicles that are available and advertised. It's in the best interest of manufacturers to convince/compel consumers to buy larger, more expensive vehicles with higher margins, and that's exactly what they're doing.

Bullshit. There are many competing auto manufacturers. No one is compelled to buy larger, more expensive vehicles. There are smaller, cheap vehicles available to those who want them. If I want a little penalty box like a Hyundai Elantra or Nissan Sentra the local dealers have base models in stock and ready to sell today.

Larger vehicles are more comfortable, safe, and practical (for anyone who doesn't need to worry about parking issues). It doesn't take advertising to convince consumers about that, it's just reality.

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