{"id":555608,"date":"2026-04-28T20:05:09","date_gmt":"2026-04-28T20:05:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/555608\/"},"modified":"2026-04-28T20:05:09","modified_gmt":"2026-04-28T20:05:09","slug":"why-the-uaes-exit-from-opec-is-a-big-deal","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/555608\/","title":{"rendered":"Why the UAE’s exit from Opec is a big deal"},"content":{"rendered":"

Leading Emirati officials talk of new pipelines from the UAE’s oil fields in Abu Dhabi, bypassing the Strait of Hormuz, and heading to the underused port of Fujairah. <\/p>\n

There is already one pipeline in heavy use today, but more capacity will be needed to cope with increased production and a permanent change to the fluidity and cost of tanker traffic in the Gulf.<\/p>\n

For now, of course, during a double blockade of sea traffic in the Strait of Hormuz, this is not the main event in oil markets, affecting the prices of oil, gas, petrol, plastics and food.<\/p>\n

While the world understandably focuses on oil at $110 per barrel, this is, however, a reason not to discount the chance that it could be closer to $50 sometime next year – if the mess in the Strait is sorted, for example, in time for the US midterm elections later this year.<\/p>\n

Opec is less important to world oil markets than it was in the 1970s<\/a>, with the 85% share of internationally traded oil it had then more like 50% today. Oil is also less critical to the world economy than it was in the 1970s. Opec has leverage now, but not a monopoly. It can’t hold the world to ransom, as it were.<\/p>\n

I recall being told by the Opec figurehead, former Saudi Oil Minister Sheikh Yamani: “The Stone Age did not end because the world ran out of stones. The Oil Age will not end because the world runs out of oil.” This foretells of a world where hydrocarbons are substituted by other energy sources.<\/p>\n

One way to read the UAE’s action is as a sign of this world of reduced oil reliance, and there have been some other clues in the current maelstrom: China’s investments in electrification have helped cushion the economic blow from rising oil and gas prices. <\/p>\n

By some calculations, the electrification of China’s cars, lorries, and trains has reduced oil demand in the world’s second biggest economy by 1 million barrels a day. Global oil demand could plateau as this trend accelerates around the world.<\/p>\n

In this view, it makes sense to raise as much money from oil reserves as quickly as possible before demand craters. The UAE has financial firepower and a partly diversified economy, through financial services and tourism. <\/p>\n

Much will depend on what the new normal becomes if and when hostilities in the Gulf cease.<\/p>\n

The UAE’s Opec exit could spark further dominoes falling here, and there will be considerable pressure now on Saudi Arabia.<\/p>\n

When the tankers flow through the Strait again, or if the UAE redoubles its attempts to build new pipelines, Emirati oil will flow like never before, unconstrained by Opec commitments.<\/p>\n

It will have little effect on the current blockades. It could change everything afterwards.<\/p>\n","protected":false},"excerpt":{"rendered":"Leading Emirati officials talk of new pipelines from the UAE’s oil fields in Abu Dhabi, bypassing the Strait…\n","protected":false},"author":2,"featured_media":555609,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-555608","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/555608","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=555608"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/555608\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/555609"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=555608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=555608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=555608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}