Trump is trying to break the OPEC oil cartel. The UAE has done exactly what he wanted

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The United Arab Emirates’ decision to leave the Organisation of Petroleum Exporting Countries on May 1 exposes long-running dissatisfaction inside the group about its direction under the leadership of Saudi Arabia. It also advances Donald Trump’s goal of weakening the powerful oil bloc.

The departure reflects the UAE’s own interests as well as its alignment with the United States. Along with Saudi Arabia’s potential funding cut to LIV Golf, it shows that the emerging regional order will be more transactional and less concerned with soft power.

The UAE was the third-largest producer inside OPEC, which it joined in 1967. OPEC expanded in 2016 when oil prices tumbled, thanks to significant increases in US shale oil production. The group formed OPEC with 10 other oil-producing countries including Russia, the world’s third-largest oil producer. OPEC sets quotas, or production targets, for each of its members. Quotas are calculated based on members’ production capacity, oil reserves, past production levels and intense behind-the-scenes negotiations.

In recent years, the UAE had invested heavily in infrastructure to increase its fossil fuel production as well as its midstream and downstream capacity. It wanted higher quotas to recoup its investments. At one point, up to a third of its pumping capability was unused, resulting in disputes that culminated in a public clash with Saudi Arabia in July 2021. It’s not the first country to be upset with Saudi Arabia’s leadership of OPEC; Indonesia left in 2016, Qatar........

© Brisbane Times