If the United Arab Emirates (UAE) were to leave OPEC, it would not mean much for global oil markets immediately, according to Matthew Bey, senior global analyst at RANE.
“Although the UAE is a major player in OPEC and one of the few countries that often has excess capacity, Saudi Arabia remains very influential and whatever they do will have a big impact on the markets,” he said Bey in Rigzone.
“The long-term question, however, is whether or not OPEC can adapt to the new paradigm globally, where Western countries are actively trying to reduce emissions and move away from oil and gas. The UAE United are perhaps the OPEC member that is trying to be the most aggressive in figuring out how to fit into the new paradigm,” Bey added.
“If the UAE eventually leaves OPEC, it could be a sign that they have assessed that OPEC itself will struggle to adjust to a world focused on reducing emissions and that the UAE’s continued participation in the bloc makes it difficult Abu Dhabi’s own strategy,” Bey continued. been
Earlier this month, the Wall Street Journal reported that UAE officials said the UAE is having an internal debate about leaving OPEC. Also in March, Bloomberg noted that the UAE has no plans to leave OPEC, citing officials who spoke on condition of anonymity.
Rigzone has contacted the UAE Ministry of Energy and Infrastructure through various channels on its website, asking if the UAE will leave OPEC. At the time of writing, the ministry has yet to respond to Rigzone.
Bey told Rigzone that there has long been growing tension between the UAE and other OPEC members, including Saudi Arabia, and said that “this is not the first time that the UAE has they raise what it would mean to leave OPEC.”
“The UAE is trying to position itself as a leader in innovative energy areas and wants to use its oil and gas industry to help finance the development of other sectors,” he added.
“They are also investing in increased oil production capacity. One of the fears they probably have is that if they don’t produce more oil now, they will eventually be stranded because of changes in consumption patterns and commitments to decarbonize,” Bey continued.
OPEC and the United Arab Emirates
OPEC is defined as a permanent intergovernmental organization. The alliance was created at the September 10-14, 1960 Baghdad Conference by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, and the United Arab Emirates later joined in 1967, according to the website of the organization
A number of countries have canceled or suspended their membership of OPEC in the past, the OPEC site explains. Qatar joined in 1961 and canceled its membership in January 2019, Indonesia joined in 1962 and suspended its membership in January 2009, reactivated in January 2016 and suspended again in November 2016, Ecuador joined in 1973 and suspended its membership in December 1992. It reactivated in October 2007, then withdrew its membership on January 1, 2020, and Gabon he joined in 1975 and canceled his membership in January 1995, but rejoined in July 2016, according to the site.
In October 2022, OPEC revealed in a statement on its site that the OPEC+ group decided to cut production by two million barrels per day from August 2022 levels at its 33rd meeting, which was held that month According to a production table accompanying this statement, Saudi Arabia and Russia will bear the brunt of this cut with 526,000 bpd each, while the United Arab Emirates will cut by 160,000 bpd. The production table indicates that the voluntary production figure for the United Arab Emirates from November 2022 to December 2023 is 3.019 million barrels per day.
OPEC+ decided to keep production stable at its 34th meeting. The group’s next meeting is currently scheduled to take place in June.
According to the OPEC Annual Statistical Bulletin, the UAE produced 2,718 barrels of crude oil, had a marketed production of 54.4 billion cubic meters of natural gas and recorded an oil export value of $54.5 billion in 2021.
To contact the author, please send an email andreas.exarcheas@rigzone.com
