The United Arab Emirates has announced it will withdraw from OPEC after more than 50 years

[mystery-ak]

https://twitter.com/Breaking911/status/2049109535726469322

[IsailedawayfromFR]

This is big.

But not as big as if Saudi would have said it.

[mystery-ak]

https://twitter.com/EndWokeness/status/2049132875316949029

[Wingnut]

Well my Bingo card didn't have that on it.

I wonder if the Oil Mafia aka OPEC will respond?

[Smokin Joe]

This allows the UAE to capitalize on higher demand and bypass OPEC production agreement restrictions, provided the Houthis can't stop their tanker stream.
They can bypass the Straits of Hormuz completely.

[catfish1957]

A lot has changed with production dynamics.  When it was formed in the '70's OPEC had 55% of world production.  That's down to 38%, and gradually dwindling due to more difficulty in finding easy oil.  As that number keeps shrinking, its kind of hard to be a cartel, if there are viable alternatives.

[IsailedawayfromFR]

OPEC is splintered as a founding member Venezuela(1960) is sidelined and an early member UAE(1967) is out.

Iran attacking may have been the final straw for UAE as Iran exhibits too much influence within OPEC.

And my experiences in the ME for decades let me know the Gulf States dislike and do not trust each other.

I visited the Partioned Neutral Zone between Saudi Arabia and Kuwait which was carved out by Britain. J.P Getty was awarded the Saudi's 50% mineral interest within its boundaries as it did not wish to deal with the Kuwaitis.

[Smokin Joe]

Well my Bingo card didn't have that on it.

I wonder if the Oil Mafia aka OPEC will respond?

If prices go too high, then the whole renewable thingy gets traction again. The UAE can only get out what will go through a 48 inch pipeline, currently between 1.2-1.8 million BOPD, a little more than the equivalent of Bakken production in North Dakota.

While that could bring prices down a bit, it also diminishes (or has the potential to diminish) demand for Iranian oil, an effect that could continue beyond the current conflict, as well as reduce a sense of urgency that might cause China to intervene in the conflict at any level.
It could be a game-changer if the UAE can push the pipeline flow to max.

Despite that, it cannot completely replace the amount of oil that was going through the Straits of Hormuz.

[IsailedawayfromFR]

A lot has changed with production dynamics.  When it was formed in the '70's OPEC had 55% of world production.  That's down to 38%, and gradually dwindling due to more difficulty in finding easy oil.  As that number keeps shrinking, its kind of hard to be a cartel, if there are viable alternatives.

I believe its share of world's oil has dwindled due to much more oil being found in many places (Guyana, Deepwater, etc.) as well as Russia oil production surges.  None of that is easy oil and the ME remains the preeminent place to produce large, quality, accessible oil at low cost.

[IsailedawayfromFR]

If prices go too high, then the whole renewable thingy gets traction again. The UAE can only get out what will go through a 48 inch pipeline, currently between 1.2-1.8 million BOPD, a little more than the equivalent of Bakken production in North Dakota.

While that could bring prices down a bit, it also diminishes (or has the potential to diminish) demand for Iranian oil, an effect that could continue beyond the current conflict, as well as reduce a sense of urgency that might cause China to intervene in the conflict at any level.
It could be a game-changer if the UAE can push the pipeline flow to max.

Despite that, it cannot completely replace the amount of oil that was going through the Straits of Hormuz.

We'll see if the renewable thing really gets going once again.

If I see a lot of capital thrown that way from the private sector instead of public sector, I'll believe it.

Otherwise, my doubts remain that it can be profitable save in selected areas.