3 ms·

> 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 "ri

> 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 6mo ago
OPEC has no rules requiring its members to sell oil in US dollars. Iran and Venezuela are members of OPEC.
thaumasiotes 6mo 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 6mo 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 6mo 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.
M3L0NM4N 6mo ago
It will probably increase total global oil production, which is good for the US consumer (what Trump seems to care about more), but not US producers.
rayiner 6mo ago
> 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. Has anyone ever quantified the benefit the U.S. supposedly gets from dollar denominated oil? How does that compare to the cost to the U.S. of paying cartel pricing for oil? Given that the U.S. is a huge oil consumer, surely the cost to it of cartel pricing in oil is huge.
- watwut 6mo ago
  Paul Krugman consistently claims that there is not much benefit from it that would be visible in data. That seems to me consistent with what economists say in general. If there is benefit it is small. It is mostly symbolic - petrodolar is a symbol of a power and people react to it.
- hollerith 6mo ago
  The US is a huge oil consumer, but these years it basically produces all it needs domestically, so even if the rest of the world (inexplicably) started turning their noses up at dollars, nothing significant would change about the US's oil supply. Also, I think the situation has changed drastically from the 1970s and that OPEC has very little influence on the price of oil. The West's decision to punish Russia for the invasion had a much bigger influence than OPEC has these years. Some one is going to respond to me with the assertion that US refineries on the Gulf Coast are specialized for refining heavy crude and cannot handle the very light crude produced domestically (or alternatively cannot efficiently produce diesel fuel and similar from the very light crude). I think the situation is more that the Gulf Coast refineries can make more money refining heavy crude, so a lot of heavy crude from other countries flows to the US Gulf Coast (and once it is refined, those refinery products get consumed mostly in the US because it would be inefficient to ship them overseas). But in exchange a lot of US-produced crude gets shipped overseas to refineries that aren't as capable as US refineries are, but that is OK because very light crude is easy to refine. The point is that the US produces slightly more crude that it uses, and could become completely self-sufficient in petroleum products after an adjustment period. Yes, the adjustment period might cause temporary shortages and be quite painful to investors long on Gulf Coast oil refineries, but it would probably not be a big deal in the grand scheme of things.
techblueberry 6mo ago
> 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.
- parthdesai 6mo ago
  Majority of US voted for Trump. Maybe not aligned with your version of US, but this is what the majority wanted
  - Ajakks 6mo ago
    Nobody wanted a war in Iran, recall how Trump wasnt going to start any new wars? We are in this conflict bc of Zionists - it had nothing to do with US interests at all.
    - M3L0NM4N 6mo ago
      Oh yes, Trump famously lets people tell him what to do. It's always the "Zionists"
      - nofriend 6mo ago
        That was pretty clearly what happened with iran. Dunno if netanyahu is a zionist or not.
      - techblueberry 6mo ago
        Can’t tell what’s sarcasm anymore.
      - Ajakks 6mo ago
        The best way to get a Trump type to do what you want is to inflate their ego and then tell they can't actually do the thing you want them to do. If you can setup them correcting you for something stupid at this point - your like half there already. If words alone don't get them dancing to the exact tune you intended - throw a few momentary glances of pity at them, make certain they clearly see you but in the same second look away - like you are tying to hide that you pity them and you pity them so much, you just cant help but "see them that way" - apologize profusely - say things like, "I'm sure when you were younger" and "you have to be realistic" - "Can't have your hand in everything" - etc. When they agree just go off about how much they don't have to do the thing, they dont owe you anything and have proven themselves already and dont need to again, blah, blah, blah (they soak this part up, so drag out the praise) on their way out - tell them how ashamed you are for being so incapable compared to them, tell them how much of an inspiration they are to you and how glad you are to know them, bc really - only they can save you. 999 times out a 1000 - the above bs will work like a charm. I dont actually think DJT would be the above "hard" to manipulate - Bibi likely made several passing comments and then outright begged him - which I think literally happened bc Trump said he "practically had to beg Israel to help" - so I'm pretty sure thats exactly what happened reversely. It was likely very theatrical. This war is Bibis wet dream fantasy made real by a narcissist with an immense amount of actual power. Nobody would have to beg him, he has been begging for this since the 90s.

letmevoteplease 6mo ago

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

thaumasiotes 6mo 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 6mo 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 6mo 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.

M3L0NM4N 6mo ago

It will probably increase total global oil production, which is good for the US consumer (what Trump seems to care about more), but not US producers.

rayiner 6mo ago

> 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. Has anyone ever quantified the benefit the U.S. supposedly gets from dollar denominated oil? How does that compare to the cost to the U.S. of paying cartel pricing for oil? Given that the U.S. is a huge oil consumer, surely the cost to it of cartel pricing in oil is huge.

watwut 6mo ago
Paul Krugman consistently claims that there is not much benefit from it that would be visible in data. That seems to me consistent with what economists say in general. If there is benefit it is small. It is mostly symbolic - petrodolar is a symbol of a power and people react to it.
hollerith 6mo ago
The US is a huge oil consumer, but these years it basically produces all it needs domestically, so even if the rest of the world (inexplicably) started turning their noses up at dollars, nothing significant would change about the US's oil supply. Also, I think the situation has changed drastically from the 1970s and that OPEC has very little influence on the price of oil. The West's decision to punish Russia for the invasion had a much bigger influence than OPEC has these years. Some one is going to respond to me with the assertion that US refineries on the Gulf Coast are specialized for refining heavy crude and cannot handle the very light crude produced domestically (or alternatively cannot efficiently produce diesel fuel and similar from the very light crude). I think the situation is more that the Gulf Coast refineries can make more money refining heavy crude, so a lot of heavy crude from other countries flows to the US Gulf Coast (and once it is refined, those refinery products get consumed mostly in the US because it would be inefficient to ship them overseas). But in exchange a lot of US-produced crude gets shipped overseas to refineries that aren't as capable as US refineries are, but that is OK because very light crude is easy to refine. The point is that the US produces slightly more crude that it uses, and could become completely self-sufficient in petroleum products after an adjustment period. Yes, the adjustment period might cause temporary shortages and be quite painful to investors long on Gulf Coast oil refineries, but it would probably not be a big deal in the grand scheme of things.

techblueberry 6mo ago

> 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.

parthdesai 6mo ago
Majority of US voted for Trump. Maybe not aligned with your version of US, but this is what the majority wanted
- Ajakks 6mo ago
  Nobody wanted a war in Iran, recall how Trump wasnt going to start any new wars? We are in this conflict bc of Zionists - it had nothing to do with US interests at all.
  - M3L0NM4N 6mo ago
    Oh yes, Trump famously lets people tell him what to do. It's always the "Zionists"
    - nofriend 6mo ago
      That was pretty clearly what happened with iran. Dunno if netanyahu is a zionist or not.
    - techblueberry 6mo ago
      Can’t tell what’s sarcasm anymore.
    - Ajakks 6mo ago
      The best way to get a Trump type to do what you want is to inflate their ego and then tell they can't actually do the thing you want them to do. If you can setup them correcting you for something stupid at this point - your like half there already. If words alone don't get them dancing to the exact tune you intended - throw a few momentary glances of pity at them, make certain they clearly see you but in the same second look away - like you are tying to hide that you pity them and you pity them so much, you just cant help but "see them that way" - apologize profusely - say things like, "I'm sure when you were younger" and "you have to be realistic" - "Can't have your hand in everything" - etc. When they agree just go off about how much they don't have to do the thing, they dont owe you anything and have proven themselves already and dont need to again, blah, blah, blah (they soak this part up, so drag out the praise) on their way out - tell them how ashamed you are for being so incapable compared to them, tell them how much of an inspiration they are to you and how glad you are to know them, bc really - only they can save you. 999 times out a 1000 - the above bs will work like a charm. I dont actually think DJT would be the above "hard" to manipulate - Bibi likely made several passing comments and then outright begged him - which I think literally happened bc Trump said he "practically had to beg Israel to help" - so I'm pretty sure thats exactly what happened reversely. It was likely very theatrical. This war is Bibis wet dream fantasy made real by a narcissist with an immense amount of actual power. Nobody would have to beg him, he has been begging for this since the 90s.