The United Arab Emirates (UAE) on Tuesday said that it would leave OPEC effective tomorrow, stripping the oil cartel of its third-largest producer, and weakening its leverage over global oil supplies and prices.
In its announcement, made via its state-run WAM news agency, the UAE said it also would leave the wider OPEC+ group, which Russia had led to try to stabilize oil prices.
“This decision reflects the UAE’s long-term strategic and economic vision, and evolving energy profile, including accelerated investment in domestic energy production,” the UAE said, adding that it would bring “additional production to market in a gradual and measured manner, aligned with demand and market conditions.”
Photo: AP
The UAE’s decision had been rumored as a possibility for some time, as it has pushed back against OPEC production quotas it felt had been too low — meaning it was not able to sell as much oil to the world as it had wanted.
“Having invested heavily in expanding energy production capacity in recent years, the bigger picture is that the UAE has been itching to pump more oil,” Capital Economics wrote in an analysis.
“The ties binding OPEC members together have loosened,” it said, particularly after Qatar withdrew from the cartel in 2019.
Regional politics are also likely at play. The UAE has had increasingly frosty relations with Saudi Arabia, OPEC’s largest producer, over political and economic matters in the Middle East, even after both came under attack by fellow OPEC member Iran during the war.
The UAE’s withdrawal from OPEC would not necessarily have any immediate effects on markets, because world oil supplies are sharply constrained by the war in Iran, which has closed off the Strait of Hormuz, a waterway through which one-fifth of global oil supplies — including much of the UAE’s — is transported.
On Tuesday, Brent crude, the international benchmark, traded above US$111 a barrel, more than 50 percent above its prewar price.
OPEC accounts for about 40 percent of the world’s oil output, but its market power had been waning in the past few years as the US ramped up production.
The UAE, which joined OPEC through its emirate of Abu Dhabi in 1967, had been producing about 3.4 million barrels of crude a day just before the US-Israeli war with Iran began on Feb. 28.
In Moscow, the Kremlin yesterday said that Russia planned to stay in OPEC+, despite the UAE decision, and said it hoped that the group would continue to operate.
Kremlin spokesman Dmitry Peskov called OPEC+ an important organization, especially during current turmoil on global markets.
“This format helps to substantially, let’s say, minimize fluctuations in energy markets and makes it possible to stabilize those markets,” Peskov told reporters.
Peskov said that Russia respects the UAE’s decision to leave and hoped Moscow’s energy dialogue with the Gulf state would continue.
Additional reporting by Reuters
PROVOCATIVE: Chinese Deputy Ambassador to the UN Sun Lei accused Japan of sending military vessels to deliberately provoke tensions in the Taiwan Strait China denounced remarks by Japan and the EU about the South China Sea at a UN Security Council meeting on Monday, and accused Tokyo of provocative behavior in the Taiwan Strait and planning military expansion. Ayano Kunimitsu, a Japanese vice foreign minister, told the Council meeting on maritime security that Tokyo was seriously concerned about the situation in the East China and South China seas, and reiterated Japan’s opposition to any attempt to change the “status quo” by force, and obstruction of freedom of navigation and overflight. Stavros Lambrinidis, head of the EU delegation to the UN, also highlighted South China Sea
The final batch of 28 M1A2T Abrams tanks purchased from the US arrived at Taipei Port last night and were transported to the Armor Training Command in Hsinchu County’s Hukou Township (湖口), completing the military’s multi-year procurement of 108 of the tanks. Starting at 12:10am today, reporters observed more than a dozen civilian flatbed trailers departing from Taipei Port, each carrying an M1A2T tank covered with black waterproof tarps. Escorted by military vehicles, the convoy traveled via the West Coast Expressway to the Armor Training Command, with police implementing traffic control. The army operates about 1,000 tanks, including CM-11 Brave Tiger
China on Wednesday teased in a video an aircraft carrier that could be its fourth, and the first using nuclear power, while making an allusion to Taiwan and vowing to further build up its islands, as it looks to boost maritime power, secure resources and bolster territorial claims. The video, issued on the eve of the 77th founding anniversary of the Chinese People’s Liberation Army Navy, featured fictional officers with names that are homophones of three commissioned aircraft carriers, the Liaoning (遼寧), Shandong (山東) and Fujian (福建). Titled Into the Deep, it showed a 19-year-old named “Hejian” (何劍) joining the group, sparking
BIG YEAR: The company said it would also release its A12 chip the same year to keep a ‘reliable stream of new silicon technologies’ flowing to its customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said its newest A13 chip is to enter volume production in 2029 as the chipmaker seeks to hold onto its tech leadership and demand for next-generation chips used in artificial intelligence (AI), high-performance-computing (HPC) and mobile applications. TSMC, the world’s biggest contract chipmaker, also unveiled its A12 chip at its annual technology symposium in Santa Clara, California. The A12 chip, which features TSMC’s super-power-rail technology to provide backside power delivery for AI and HPC applications, is also to enter volume production in 2029, a year after the scheduled release of the A14 chip. The technology moves
RSS