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UAE to leave OPEC

• christkv 5mo ago
  They represent 4.5% of oil production it seems. It will be interesting to see what this means longterm.
  • giantg2 5mo ago
    Probably not much unless others follow suite.
    • cestith 5mo ago
      It could be the first domino. They do have a port on the Gulf of Oman fed by a pipeline from their major fields well inland. This may turn out to be minimal for the world, but it could be huge for the UAE and their major customers.
  • moralestapia 5mo ago
    4.5% most likely capped to meet OPEC agreements. There's no ceiling now (although, it will obviously not be 100% or even close).
  • leonidasv 5mo ago
    "Oil" is not a homogeneous thing. There are different grades of oil and refineries are built to process specific grades of oil. UAE produces the so-called "Dubai Crude" oil grade, which is very sought after.
• boringg 5mo ago
  Is this as a function of the Iranian war?
  • GypsyKing716 5mo ago
    Worst case for the Middle East - OPEC is disolved.
  • kilroy123 5mo ago
    I think they just want to pump as much as they possibly can to cash out now while they can. The writing is on the wall for fossil fuels. Even _they_ are doubling down on solar power and switching away from fossil fuel. https://en.wikipedia.org/wiki/Solar_power_in_the_United_Arab_Emirates https://en.wikipedia.org/wiki/Solar_power_in_the_United_Arab...
    • noosphr 5mo ago
      They also build out more nuclear power than all of the west comnined: https://en.wikipedia.org/wiki/Barakah_nuclear_power_plant https://en.wikipedia.org/wiki/Barakah_nuclear_power_plant
    • energy123 5mo ago
      Earth is going to run out of oil in 50 years at current rates. One way or another, the status quo is going to change.
      • willmadden 5mo ago
        No it isn't!
      • spacebanana7 5mo ago
        The world will never run out oil supply, demand will likely go first. There are dozens of ways to increase production through world peace, better drilling technology and ideological conversion. Most of African production is well below geological potential (Libya being the easiest example, but also applies to Nigeria and the DRC etc). European shale is barely investigated, Russia is restricted by sanctions, the Middle East by war. Antartica and the Falklands are relatively unexplored but feasible. However, the electrification of transport will erode demand in everything besides heavy shipping and jet fuel. Without that demand oil prices will crater.
• dgrin91 5mo ago
  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?
  • juujian 5mo ago
    That would also explain why UAE is oddly in favor of a war in their region.
    • energy123 5mo ago
      Oman benefits significantly more from the war in Iran than the UAE, but is the most favorable country towards Iran in the GCC. See the visual here: https://archive.is/Xt3gd https://archive.is/Xt3gd Saudi Arabia and the UAE have been urging the US to bomb Iran since 2015 for their own non-oil reasons. They see political Islamism as a strategic and domestic threat. That's why they had Qatar under a blockade for a number of years. Iran is their biggest rival, exporting militancy to Yemen - the Houthis who UAE and Saudi Arabia battled for a number of years last decade. A number of attacks on Saudi and UAE oil and gas facilities from Iran Quds-backed militant groups in Iraq across 2019-2022. None of this makes the news in the West.
      • dmix 5mo ago
        UAE's major issue with Saudis is their quiet support for Islamism as well. They know countries like Iran exploit for it like a wildcard which always backfires and destabilizes the region, which is bad for business.
        • Cyph0n 5mo ago
          No. The UAE’s major issue is that KSA has finally awoken from its deep nonsensical slumber (I can elaborate further if there is interest). This is a battle of economies and regional influence.
• eykanal 5mo ago
  Is there an explainer on this? I'm not familiar with the geopolitics or oil cartels well enough to understand the implications here.
  • cj 5mo ago
    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 OPEC countries. Which to me sounds like a good thing for the rest of the world?
    • kibwen 5mo ago
      > Which to me sounds like a good thing for the rest of the world? It probably isn't a bad thing, but let's not overestimate the beneficial effects. The reason oil prices are high right now isn't because of cartel fuckery, it's because of Trump and his war. And oil supply chains are in such chaos because of Trump's war that even if it ended tomorrow it would take markets multiple years to return to a pre-war state. The bottom line is that oil prices are going to be elevated for years to come, and when oil prices are high, OPEC has nothing to do other than sit back and collect the profits. And thanks to the ongoing solar revolution, oil's days as the world's predominant geopolitical poker chip are numbered; by mid-century OPEC won't be relevant anyway.
      • nradov 5mo ago
        By mid century, worldwide fossil fuel usage will be higher than it is today. Solar will take over some of the electricity production including transportation but in the overall energy mix it will largely be a supplement, not a replacement. Total per capita energy use from all sources will continue to increase at a rapid rate.
        • kibwen 5mo ago
• JumpCrisscross 5mo ago
  Context: (1) “The United Arab Emirates,” today “made a shock request of [Pakistan] — repay $3.5bn immediately” [1]. (2) Saudi-Emirati relations were at an all-time low before the Iran War [2]. (Saudi Arabia just bailed Pakistan out of its Emirati loan. Saudi Arabia and Pakistan agreed a mutual-defence treaty last year [3].) 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. What I don’t yet see is the ambition of the endgame. Is it Saudi Arabia backing off in Africa? Or is it seizing the Musandam Peninsula, islands of the Strait and possibly even territory on the other side? [1] https://www.ft.com/content/99073d6e-4b57-417f-88fb-7a2c0e55eef3?syn-25a6b1a6=1 https://www.ft.com/content/99073d6e-4b57-417f-88fb-7a2c0e55e... [2] https://www.nytimes.com/2025/12/30/world/middleeast/yemen-saudi-strike-uae.html https://www.nytimes.com/2025/12/30/world/middleeast/yemen-sa... [3] https://en.wikipedia.org/wiki/Strategic_Mutual_Defence_Agreement https://en.wikipedia.org/wiki/Strategic_Mutual_Defence_Agree...
  • pjc50 5mo ago
    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.
    • bawolff 5mo ago
      I think there are only 3. Houthis (iran), PLC (saudi), and STC (UAE). I guess Al-Qaeda and Isis are also there.
      • renticulous 5mo ago
        On whose side is Turkey? Or is it charting its own path?
        • 21asdffdsa12 5mo ago
          [flagged]
• DrProtic 5mo ago
  I see this as a temporary action to contain oil prices, orchestrated by the US. I expect UAE to send signals that they will increase production considerably once situation allows. Whenever oil prices surge or 10Y yield touches 4.4% we get some action to contain them.
  • JumpCrisscross 5mo ago
    > I see this as a temporary action Unlikely. Out of OPEC’s twelve members [1], one is controlled by Trump, one—the third largest—is bombing the UAE and the other—the absolute largest—is on the other side of every proxy war the Emirates are invested in. As a multi-lateral organization it’s about as fucked as BRICS. [1] https://en.wikipedia.org/wiki/OPEC https://en.wikipedia.org/wiki/OPEC
    • caminante 5mo ago
      The cartel can't even self police. These are like climate pledges. > since the 1980s [OPEC] largely failed to achieve its goals [...] > members have cheated on 96% of their commitments. > One large reason for the frequent cheating is that OPEC does not punish members
• madihaa 5mo ago
  Okay this I did not see coming... If it actually happens it's going to cause a alot of ripple in the energy market. Good or bad? Hell if I know.
• jmyeet 5mo ago
  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 "big dog" in OPEC. OPEC+ is really about Russia even though it also includes Kazakhstan and Mexico. Russia became a major oil producer and exporter in the last 20-30 years. OPEC generally likes stability in oil prices. How it works now is that every 3 months they meet and figure out what the demand for oil will be and adjust production based on that projection to maintain both a price floor and a price ceiling. Prior to this conflict that range was $70-80. Each member gets a share of that production. OPEC hasn't always been successful in policing member countries who have at times exceeded their production targets and also lied about production cuts. Gulf countries now are utterly dependent on US arms to maintain their (typically unpoular) despotic regimes (usually monarchies). The UAE is particularly belligerent here. I view Dubai as a cleaner, shinier Mos Eisley. The UAE is directly responsible for the genocide in South Sudan. US arms are diverted to the RSF in exchange for illegally smuggled gold to Duabi that gets laundered via Switzerland [1]. Dubai is a terrible place. Beyond Russia's rise as a major energy exporter, the US also became one in the last 15 years, particularly in 2015 when the export ban was lifted on crude oil (which had been there since the 1973 oil shock). OPEC countries are generally unhappy about this development because every barrel the US exports tends to be 1 barrel OPEN doesn't. But they're also largely powerless to do anything about it. The Iran War is a massive strategic blunder by the US because it's shown the US has been unable to stop Iran from closing the Strait of Hormuz despite spending $1T+ a eyar on its military but, just as bad, it's shown that the US cannot or will not defend GCC countries or even its own bases in those countries from Iranian counterattacks. Foreign countries generally pay for US bases as part of a broader security agreement and the idea of joint responsibility for security guarantees. But what if those guarantees are essentially worthless? This will completely reshape the US relationships with GCC countries. The UAE is really just the first domino to fall. 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. But I think this will long-term further destabilize the region and I wouldn't be surprised if some of these governments end up falling or at least break security ties with the US. If anything, GCC countries will likely see China as a more reliable and stable trading and security partner as a result of all this. [1]: https://www.democracynow.org/2025/1/28/sudan https://www.democracynow.org/2025/1/28/sudan
• 1970-01-01 5mo ago
  This is how peak oil happens. Without a healty cartel, oil is doomed. Solar, wind, geothermal, hydro, nuclear. These are more than ripe to disrupt energy into the 21st century.
  • cj 5mo ago
    > 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.
    • WarmWash 5mo ago
      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.
      • Ajedi32 5mo ago
        > Too low and players start losing money Only the non-competitive ones. That's how competition works. OPEC would be deemed an illegal anti-consumer price fixing scheme under the laws of any country with even the most basic of anti-trust laws, if not for the fact that its entirely composed of sovereign countries not subject to any law but their own.
        • philistine 5mo ago
          If the price is too low and fields stop being exploited because they're unprofitable, you reduce the volume produced each day. That means there's scarcity with a low price, and you're back at trying to switch en energy source because you just can't get oil. That moves prices upward, because people are willing to pay more, but increasing production is not like turning the faucet in your home. It takes time. This is the instability of oil production that OPEC tries to prevent, to keep the world hooked on readily available just cheap enough oil.
• woodruffw 5mo ago
  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.
  • jmyeet 5mo ago
    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. For some more background, OPEC tries to maintain oil price stability. If it gets too low, they don't make enough money. If it gets too high it creates political instability and jeopardizes security relationships with the US and Europe. So every 3 months OPEC meets and looks at oil supply and the projected demand and they adjust production to maintain a price floor and a price ceiling. Before the war this was typically $70-80. In years past it might've been $60-70. They don't always succeed because of exteranl factors, unforeseeable changes in demand or even just member countries lying about production or production cuts. So in April-May, the then Trump administration went to Saudi Arabia to get them and OPEC to cut oil production [1][2][3]. Instead of the 3 monthly reviews which would've naturally cut production anyway to maintain the price, Trump browbeat MBS into a 2 year production cut, initially 9.7Mbpd (million barrels per day) and then reducing over time to I believe 6.3Mbps [4]. This was a disastrous deal. You can overlay a chart of the 2 year deal and global inflation and they match up pretty much exactly. The Biden administration quietly went to MBS and asked him to end the deal. He refused. There are historical reasons for this, namely that the US (under Trump) had kinda screwed Saudi Arabia over in 2015, 2017 and 2018 but I digress. So in the US the politics of this were that Republicans were going to pin this on Biden (even though it was a Trump deal) and the Democrats were never going to blame Saudi Arabia. Instead it was just "oil companies are greedy and bad" from a pure short-term politics POV. Nobody brought up the 2020 OPEC deal. And that's wild to me. It just goes to show that US foreign policy is uniparty and a Democratic administration was never going to publicly split with an ally like Saudi Arabia. So does OPEC matter? Well they were instrumental in enforcing that deal. So you tell me. [1]: https://www.reuters.com/article/economy/special-report-trump-told-saudi-cut-oil-supply-or-lose-us-military-support--idUSKBN22C1V3/ https://www.reuters.com/article/economy/special-report-trump... [2]: https://www.reuters.com/article/business/opec-russia-approve-biggest-ever-oil-cut-to-support-prices-amid-coronavirus-pan-idUSKCN21U0J5/ https://www.reuters.com/article/business/opec-russia-approve... [3]: https://www.reuters.com/business/energy/opec-would-miss-friend-trump-wary-strains-under-biden-sources-say-2020-11-08/ https://www.reuters.com/business/energy/opec-would-miss-frie... [4]: https://www.reuters.com/article/us-global-oil-saudi-cuts-idUSKBN23F1BV/ https://www.reuters.com/article/us-global-oil-saudi-cuts-idU...
• elphinstone 5mo ago
  Leaving OPEC right now means little short-term with so much production shut-in. Long-term, the UAE may cease to exist if this war goes on. Its population is 80%+ guest workers, it's totally dependent on desalination, food imports, and oil/gas exports and is incapable of defending itself on its own.
• 2901Asg 5mo ago
  The UAE was talking about getting a credit swap line from the US. It could be the condition. Or it is also part of a long term plan of the US to control all energy routes. It will keep Hormuz closed and try a new pipeline via the UAE to the Gulf of Oman. Fragmentation of the energy producers is another goal. New Alaskan LNG projects have been approved and are all the rage among senators: https://xcancel.com/alaskalng https://xcancel.com/alaskalng A happy coincidence: "Alaska LNG will deliver vital #EnergySecurity for our military and allies in the Pacific. Thank you @SenDanSullivan for your continued engagement and advocacy." The US would control the following: - Baltic sea via pipeline threats. - Corridor from the Caspian sea from Azerbaijan through Armenia to Turkey. - Venezuela. - UAE corridor to the Gulf of Oman. Probably much more than that. Grabbing the Arctic route via Greenland has failed so far.
• jacknews 5mo ago
  UAE is toast, it's glitter was just influencers and glass in the desert, resting on the flow of oil.
• dueltmp_yufsy 5mo ago
  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.
  • thaumasiotes 5mo ago
    > 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.
  • tamimio 5mo ago
    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.
• cogman10 5mo ago
  > 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 oil. The UAE's exit almost certainly signals they are planning on selling oil in other currencies (probably the Chinese yuan). It's also a sign of the UAE wanting out of the partnership it's enjoyed with the US and it's allies.
  • letmevoteplease 5mo ago
    OPEC has no rules requiring its members to sell oil in US dollars. Iran and Venezuela are members of OPEC.
  • thaumasiotes 5mo ago
    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.
  • bilbo0s 5mo ago
    In fairness to the UAE, of all the nations of the world, they're the ones who have lost the most economically speaking in the current unpleasantness. It's kind of unfair. If they can recoup some of those losses selling outside the system in Chinese currency, (or even in US currency), I have to imagine that would provide some ameliorative relief. It won't make them whole. They've got a lot of problems right now. But I mean, at least it starts them filling back in the giant hole that everyone else dug for them.
    • don_esteban 5mo ago
      Of all the nations of the world, the one that has lost the most (at least in the short term) is clearly Iran. On the other hand, from the longer term point of view, it looks like big part of the business model of UAE/Dubai (a safe, luxury place for rich) has been shattered and I don't see it coming back. In the short term, they might want extra revenue, but in the long term, creating extra tensions with their neighbour can't be good.
• netdur 5mo ago
  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
  • thaumasiotes 5mo ago
    Russia-led? Russia isn't even part of OPEC.
    • MobiusHorizons 5mo ago
      I believe they are in opec+
      • willchis 5mo ago
        That's the ad-free version, it's an extra $12.99 a month.
        • WorldPeas 5mo ago
          it's not really worth it after the recent price-hike, they aren't putting out content like they used to
  • Havoc 5mo ago
    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
    • nimbius 5mo ago
      exactly. this sounds like a third path where the UAE charts its own course, and that course increasingly looks paved in Yuan. OPEC cartel membership didnt gain it access to Hormuz, and the US petrodollar promise to protect UAE states from aggression in exchange for trade in USD could not be upheld.
• austin-cheney 5mo ago
  UAE is responsible for 12-13% of OPEC output as its third most productive member. In 2019 Qatar left OPEC, but nobody cared because oil is less than 10% of their national fossil fuel output, which was about 2% of OPEC's oil output.
• cmiles8 5mo ago
  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 dynamics.
  • ch4s3 5mo ago
    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.
    • Tangurena2 5mo ago
      Venezuela produces heavy "sour" crude (this means high in sulfur). Many of the US refineries capable of handling sour crude have closed, partly because the sulfur content makes the refineries stink (and emit lots of pollution) and partly because they need more expensive piping to handle the corrosive materials (not just the crude, but HF acid that's used in the refining process). The last refinery to be built in the US opened in the 1970s. Since then, refineries have closed. None of the owners of refineries will sell them because of SuperFund legislation. It is the same reason that when a gas station is sold, the fuel tanks are dug up and replaced. This way, there's no way to claim that the previous owner left hazardous material to be cleaned up. SuperFund laws say that every previous owner is liable for the cost of cleanup. It doesn't matter how long ago the property was sold.
    • downrightmike 5mo ago
      2017 when Venezuela accepted RMB for oil and then USDT crypto. USDT is being used to skirt the US's control of the oil and bypassing the dollar. The ships passing through the straight now are also paying Iran in RMB and crypto. The petrodollar is the objective. This isn't over any time soon
      • actuallynotso 5mo ago
• iLemming 5mo ago
  "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.
  • RobRivera 5mo ago
    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
    • bluGill 5mo ago
      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)
      • nine_k 5mo ago
        Petromonarchies invest a lot into alternative asset classes: semiconductor industry, logistics and shipping, power electric machines, biomedical development, etc. Renewables are in the list, too.
        • bluGill 5mo ago
          Most of those are things that depend on cheap energy [mostly oil] today. Only renewables do not, and it is questionable if we will transition fast enough to not collapse society for lack of energy (though this is looking good)
• nashashmi 5mo ago
  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.
• deleted 5mo ago
  [deleted]
• bluGill 5mo ago
  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 everyone else is following along the prices are higher. (see also prisoners dilemma)
  • asah 5mo ago
    [flagged]
  • api 5mo ago
    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.
    • jagraff 5mo ago
      Agreed - the good news is, in many circumstances renewable energy is cheaper for new energy capacity. As long as regulations move in the right direction, we are likely to see the global energy mix move towards renewable sources over time
      • don_esteban 5mo ago
        Not only is the renewable energy cheaper, it also raises energy independence, which turns out to be quite relevant in today's world. Furthermore, it also reduces the drain on the (often very fragile, for thirld world countries) foreign reserves, especially relevant when the oil prices fluctuate wildly. If your solar panels are old and you don't have money to replace them, you get slightly less electricity. If you are out of gasoline/diesel and you have no money to buy it, you have a big, big, problem.
• Ifkaluva 5mo ago
  Can somebody knowledgeable help me understand why this is in the interests of the UAE? Also, seems like a moot point since the strait is closed. Why do they think it’s in their best interests, and why now?
  • dannyw 5mo ago
    They don’t have production limits anymore, and can produce and sell as much oil as they have capacity for.
    • Ifkaluva 5mo ago
      Ok but: - why now? What has changed that made the lack of limits more attractive than it used to be? - despite no limits, the strait is blocked, so they still can’t sell anything?
  • rramadass 5mo ago
    1) The UAE has its "Abu Dhabi Crude Oil Pipeline" (see https://en.wikipedia.org/wiki/Habshan%E2%80%93Fujairah_oil_pipeline https://en.wikipedia.org/wiki/Habshan%E2%80%93Fujairah_oil_p...) to Fujairah export terminal on the "Gulf of Oman" bypassing the choke-point of "Strait of Hormuz" entirely. Given the current blockade of the strait and its uncertain future, Fujairah is now central to crude oil shipments for the World Market. 2) Thus far, the UAE has been prevented from maximizing its revenues due to OPEC/OPEC+ production caps which is no longer acceptable due to global needs. It can now chart its own independent course by ramping up production and earn hard currency which can be its leverage against an uncertain future. For instance, UAE just signed a deal with South Korea to give it guaranteed "priority access" (meaning first before others) and "joint stockpiling" (for world market) of 24 million barrels. Other countries in Asia who have storage capabilities are also "tripping over each other" to cut similar deals with UAE. This is once-in-a-lifetime opportunity not to be missed. 3) Discontent with OPEC/OPEC+ and its members since the current conflict has made it clear that nobody will come to its aid when the chips are down (other than the US). It is "every man for himself" now and thus UAE has decided to chart its own independent path. This is very welcome news and i hope other OPEC/OPEC+ members will also follow suit in their own national interests.
• bhouston 5mo ago
  The US is bailing out the UAE for liquify issues and this is likely a quid pro quo in return??
  • Tangurena2 5mo ago
    Well, it looks like the return on investment for that 747 bribe is pretty bad.
    • TheGuyWhoCodes 5mo ago
      It was given by Qatar not the UAE.
• Yizahi 5mo ago
  Great news, I hope this will finally crash russia, just like the same events back in the 80s caused soviet empire collapse.
• cindyllm 5mo ago
  [dead]
• asah 5mo ago
  Counterintuitively, I see modern OPEC as mostly net-positive for the West because business and government most cherish stability which OPEC helps provides (emphasis on helps).
• 0xbadcafebee 5mo ago
  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
  • mattmaroon 5mo ago
    It does seem like the petrodollar is coming to an end. Even if we wanted to keep killing/abducting the leader of every tiny oil nation shortly after the decide to sell oil in another currency (like we did to Iraq, Libya, and Venezuela), bigger ones we can’t just do that to practically are going to start. The writing is on the wall. It might take decades, but it’ll end.
  • throwaway2037 5mo ago
    The petrodollar and petroeuro is misunderstood. The real point: These oil/gas exporting nations don't have enough investable assets in their own nations. As a result, they need to invest overseas. For a long time, the best places to invest this excess capital in the world were/are North America, Europe, and Northeast Asia (Japan/Korea/Taiwan). If you want to say that petrodollar or petroeuro is doomed, what will replace it?
    • 0xbadcafebee 5mo ago
      It's not that the petrodollar is doomed, it's just 'devaluing'. The US isn't a stable, safe place for cash anymore. But the world still needs massive amounts of safe cash. So there really is only one alternative: diversify. They'll diversity into Gold, rare-earth metals (they're only getting more important), CIPS, Yuan, Euro. That diversification helps everyone else, but will hurt the US, which hurts financial markets, and thus everyone else. And once they're all divested, the diversification will add risk and losses. Can't be helped though, they still need security. So we're looking at a generation of slow global decline, probably propped up slightly by the industrialization of AI (which of course China is leading the world in, as nobody cares about "better", they care about "cheaper"). China is the real winner, because all they need is oil, and their partners will make sure they get a steady supply (because it's in their partners' interests; that's what having allies is all about). US can't stop this; their military isn't equipped to fight wars on multiple fronts, their lumbering, expensive weapons can't be sustained in a protracted conflict, their wars aren't popular at home, and they don't have the manpower. Even when they eventually start the draft back up it'll take years to build up their warfighting capabilities, and by then the world will have diversified enough that they can take the hit. (The US will try a World War anyway to try and retain the Empire, because their leaders are psychotic morons and their people are compliant, but they'll still lose. (Historic parallel: Sparta. Great military, but tiny, so most of their power came from wealth and tenant states; eventually the rest of the mediterranean got tired of their shit (installing dictatorships, alienating allies) and their empire died. Hell, even their Navy was paid for by Persia - foreign investment used to weaken rivals via proxy war)) I don't think this is avoidable. Nobody trusts the US now. The divestment has already begun. Countries aren't suddenly going to change their minds - even if Trump doesn't overthrow the government to cement this new status quo in 2028 (which he 100% will), the next President could be another Trump. Nobody wants to be subject to their insane policies (foreign & fiscal) anymore. So the US isn't a secure place for cash. Nations aren't just going to shrug and ignore it, they're going to act to protect their interests.
• _oxxa 5mo ago
  Well, looks like that was the price for getting the USD swap line. Milkshake theory won't last long, just like the petro dollar.
• contingencies 5mo ago
  What's a good investment vehicle for broader energy transition?
  • joshribakoff 5mo ago
    NEE, trades like a bond. They do financial derivatives with carbon credits (sorta)
  • corford 5mo ago
    There are quite a few "clean energy" ETFs (e.g. GRID, PBD, ICLN). There are nuclear/uranium themed ones too. No comment/view on whether any of those are good or not.
• sciencesama 5mo ago
  is there a vested interest for usa and our war partner ?
• silexia 5mo ago
  This is titanic, earth shattering news. The breakup of the OPEC cartel would be on the best things to happen to humanity this century.
• deleted 5mo ago
  [deleted]
• curio_Pol_curio 5mo ago
  archive for the Reuters article https://archive.ph/uSXJx https://archive.ph/uSXJx
• choam 5mo ago
  Even if the UAE increases crude oil production, wouldn’t it have little impact on oil prices if the Strait of Hormuz isn’t open?
• notepad0x90 5mo ago
  an interesting variable in all this is China. the whole crisis, and maduro being kidnapped by his american counterpart dictator, has left them only russia left as a major source of petroleum overseas. If I had to guess, the UAE is looking to form petro-alliances, and have a negotiating leverage. They're have to compete, and they can't beat saudi. So, either the US caters to their demands, or they'll be forming alliances with india and china, where currently OPEC's price setting was a limiting factor.
  • brazukadev 5mo ago
    > has left them only russia left as a major source of petroleum overseas. China is currently importing 1.6M barrels/day from Brazil
• zhouquanxi 5mo ago
  [flagged]