Dissecting the intersection of
Economics, Geopolitics & Financial Markets
The United Arab Emirates are set to leave OPEC on 1 May. Who is next? A few facts & questions:
The Facts:
1) UAE = around 12% of OPEC crude oil output or 3.6mn BpD at end-Jan
2) In line with the OPEC+ agreement, UAE output = almost 1mn BpD less than capacity
3) UAE departure leaves 11 members with output (in Jan) of ca. 25mn BpD & capacity of ca. 29mn BpD
4) In Jan, total world crude oil output was around 80mn BpD (+27mn BpD other liquids)
5) OPEC was founded by 5 members in 1960 - UAE joined OPEC in 1967
6) Some members suspended & rejoined in past. But Ecuador, Qatar & Angola ultimately left, while Indonesia suspended membership
The Questions:
1) What does this mean for GCC cohesion?
2) Does this imply a dispersion of relations between individual GCC members and the rest of the world?
3) Does this increase the likelihood of other countries such as Venezuela leaving OPEC?
4) One would assume that when Hormuz is open, UAE will supply more oil than before, placing extra calming pressure on oil prices
