May 21, 2024
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OIL & GAS

UAE not leaving OPEC – Report

The United Arab Emirates has no plans to leave the OPEC oil alliance, according to officials speaking on condition of anonymity in a Bloomberg report.

In the report, it cited an earlier story by the Wall Street journal that a growing rift with Saudi Arabia means the UAE is having internal discussions about quitting the producer group, a move that could potentially leave it free to lift output.

It said the UAE has said publicly and privately it is sticking to the current OPEC deal for at least this year.

The major producer has for some years been contemplating what alliances best suit its long-term interests, as the country seeks to monetize recent expansion in its production capacity. In a previous OPEC+ dispute with Saudi Arabia, the group’s policy decision was held up for weeks, though in the end a compromise was found.

The danger of this move by the UAE could spell disaster for mono-cultural countries particularly in Africa as increased output will force prices lower, shrinking the revenue of small producers with rentier economies.

Nigeria, Angola and a few other countries in Africa have pegged their projections on a higher side and on such calculations, embarked on capital projects locally. This could shrink the economy and force the halt of these projects.

India and China are already raising purchase with Russia for the relatively cheap oil on offer. Since the beginning of the Ukraine–Russia war, India had doubled Oil imports from Russia at the detriment of Nigeria and a few other energy sources.

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