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UAE to leave OPEC

ft.com

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Re: UAE to leave OPEC

#111

Post by aprilthird2021 »

wat10000 wrote: post #87
bilegeek wrote: post #82

Earlier quoted context omitted.

They're not buddies per se, but Egypt was the first ME country to normalize relations.

They've also been cooperating on blockading Gaza for a couple of decades. Israel gets most of the attention for that, mostly rightfully so, but people seem to forget that there's a border with Egypt too and that has also had very limited access.

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

Re: UAE to leave OPEC

#112

Post by kasey_junk »

itopaloglu83 wrote: post #15
dgrin91 wrote: post #5

My guess is that is this because UAE has ports on the other side of Hormuz and doesn't want to be restricted in their usage by OPEC? Does this mean UAE thinks Hormuz will be a problem for a long time? And what does it mean for oil prices long term?

They might be leaving either for a) price independence or b) currency flexibility.

OPEC doesn’t enforce currency or monetary policy rules.

Re: UAE to leave OPEC

#113

Post by pjc50 »

aprilthird2021 wrote: post #105
delecti wrote: post #74

Earlier quoted context omitted.

> Put together, we’re seeing an Emirati-Israeli axis emerging to balance Saudi hegemony in the Gulf and Iranian hegemony over the Persian Gulf. I’d expect to see an Emirati deal with Egypt and India next if this hypothesis is correct. Don't Egypt and Israel hate each other though? Could UAE feasibly align with both?

If Egypt were a democracy, its government would hate Israel. That's why the current dictator overthrew the last democracy and had its elected leader die in jail, and that same dictator is now supported heavily by US funding

The briefly elected Muslim Brotherhood government of Egypt was .. not as liberal as the Tahrir Square protests demanded.

Re: UAE to leave OPEC

#114

Post by thaumasiotes »

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.

> 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.

Where does the article say that? It says this is expected to lower the price of oil.

It also says that, because the price of oil is currently unstable, the impact will be difficult to see:

> Mazrouei said the move, in which the UAE will also leave the OPEC+ grouping, would not have a huge impact on the market because of the situation in the strait.

But it doesn't say anywhere that there's uncertainty over in which direction this moves the price of oil. The uncertainty is over what the price of oil will be.

Re: UAE to leave OPEC

#115

Post by trollbridge »

ceejayoz wrote: post #96
wat10000 wrote: post #87

Earlier quoted context omitted.

They've also been cooperating on blockading Gaza for a couple of decades. Israel gets most of the attention for that, mostly rightfully so, but people seem to forget that there's a border with Egypt too and that has also had very limited access.

To be fair, part of the peace deal between Egypt and Israel gave Israel some control over the crossing, and they seized it entirely during the war. https://en.wikipedia.org/wiki/Rafah_Border_Crossing > The Rafah crossing was opened by Israel after the 1979 peace treaty and remained under Israeli control until 2005... > Under a 2007 agreement between Egypt and Israel, Egypt controls the crossing but imports through th…

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.

Re: UAE to leave OPEC

#116

Post by thaumasiotes »

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…

It's a win for Trump in the pretty straightforward sense that it's something he publicly announced he wanted.

Whether he finds the overall effects positive or negative is a different question.

Re: UAE to leave OPEC

#117

Post by letmevoteplease »

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…

OPEC has no rules requiring its members to sell oil in US dollars. Iran and Venezuela are members of OPEC.

Re: UAE to leave OPEC

#118

Post by thaumasiotes »

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

Russia-led? Russia isn't even part of OPEC.

Re: UAE to leave OPEC

#119

Post by woodruffw »

aprilthird2021 wrote: post #111
wat10000 wrote: post #87

Earlier quoted context omitted.

They've also been cooperating on blockading Gaza for a couple of decades. Israel gets most of the attention for that, mostly rightfully so, but people seem to forget that there's a border with Egypt too and that has also had very limited access.

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).

Re: UAE to leave OPEC

#120

Post by Havoc »

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
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