ABU DHAI (Middle East Eye) – The Wall Street Journal has reported that new fissures within OPEC, as a result of energy policy differences with Saudi Arabia, were triggering a debate in the UAE about leaving OPEC altogether. But shortly after the WSJ article appeared, an Emirati official, speaking on condition of anonymity, told Bloomberg the UAE has no plans to leave the OPEC alliance.
A decision by the UAE to leave OPEC would have ramifications across world energy markets, and Brent prices fell almost three percent on Friday following the WSJ report but have recovered since. By the afternoon EST Brent was trading up .85 percent at 81.88 per barrel.
Saudi Arabia and the UAE are divided over oil production, with the smaller Persian Gulf state eager to boost output now when oil prices are high while its bigger neighbor wants to limit supplies to support prices for the longer term.
Last October, OPEC+, led by Saudi Arabia, agreed to reduce output by two million barrels per day. The U.S. slammed the move, accusing OPEC+ of siding with Russia to keep energy prices elevated amid the war in Ukraine.
The UAE publicly defended the cut as “technical and not political”, but U.S. officials say the Emiratis privately expressed opposition to the move, according to the WSJ.
Under the OPEC+ deal, the UAE is only allowed to pump three million barrels a day, considerably less than its four million barrel-a-day capacity. Abu Dhabi National Oil Company has a five million barrel-a-day production target by 2027.
In the summer of 2021, differences between Abu Dhabi and Riyadh spilled out into the open during a meeting of OPEC+ ministers, after the UAE rejected a Saudi-led proposal to extend a pact to curb oil production.
The feud underscores the challenges Persian Gulf petrostates face in preparing their economies for the green energy transition.