Yesterday, the oil market took another major jolt when the United Arab Emirates announced that it is quitting Opec. The UAE is the third-largest producer in Opec, and they’ve been complaining for years that restrictions on production to keep prices high are preventing them from selling as much oil as they want.
The UAE withdrawal could signal the beginning of an oil glut and lower prices. The UAE likely sees this as a good time to bail since Opec is at a weak point thanks to the ramping up of oil production under US President Donald Trump, reportedly outproducing Russia and Saudi Arabia combined, plus Trump bringing Venezuelan oil under US influence.
It’s almost as if the US leader has a master plan to choke off oil and oil revenues of his enemies while forcing oil prices down. But nah, that’s impossible, he’s chaotic and has no plan.
Wandile Mtana, Uitenhage
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- The United Arab Emirates (UAE), OPEC’s third-largest oil producer, announced its withdrawal from the organization.
- The UAE has long criticized OPEC production limits, which it says restrict their ability to sell more oil.
- The exit could trigger an oil surplus (glut) and cause oil prices to fall.
- The UAE’s departure comes as US oil production surges, reportedly surpassing Russia and Saudi Arabia combined.
- US policies under President Trump appear to be reducing revenue for rival oil-producing countries, intentionally or not.
