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Page added on November 28, 2020

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Could OPEC’s House of Cards Collapse?

As the cartel’s oil ministers prepare to meet in just over a week to decide on the next step in their record-breaking output deal, officials in the United Arab Emirates, normally a loyal Saudi ally, are privately questioning the benefits of participating, and may even be considering whether to leave the Organization of Petroleum Exporting Counties.

The deliberations, leaked to the press on Wednesday, may be nothing more than an attempt to get the producer group to review the Persian Gulf country’s quota. If so, it seems unlikely to succeed. Worse, it risks throwing a wrench into the discussions over how producers should respond to the conflicting pressures from positive vaccine news and the negative impact of renewed coronavirus lockdown restrictions on travel and economic activity.

Questions about the UAE’s future in OPEC, even if they are only preliminary internal deliberations, come at an awkward time for the group and its OPEC+ allies. Tensions are emerging over what to do about output targets, which are set to be eased from the beginning of next year.

The answer seems obvious. Covid-19 vaccines are unlikely to affect oil demand any time soon and stockpiles remain high. Meanwhile, Libya, an OPEC member emerging from civil war, has added about 1 million barrels a day to supply in a matter of weeks. As a result, the OPEC+ alliance is expected to extend the current output cuts for another three to six months.

But there’s a spanner in the works: Not everyone is respecting their commitments. So the UAE, already chafing at the restrictions, says there shouldn’t be any decision until all members have fully implemented their agreed cuts.

Figures presented at last week’s meeting of the Joint Ministerial Monitoring Committee, which oversees the OPEC+ output deal, show that fewer than half of its signatories have done so.

While over-producers like Iraq, Nigeria and the UAE itself have come under intense pressure from OPEC’s de facto leader Saudi Arabia to compensate for past failings with deeper “compensation cuts,” one country has remained conspicuously absent from the roster of cheats: Russia. Despite being the OPEC+ group’s second-largest over-producer, the country has faced no public criticism whatsoever.

Long seen as the Saudis’ most reliable ally in OPEC, it’s easy to understand why the UAE chafes at this apparent favoritism towards Russia — regarded for decades as a competitor. Especially considering the very public humiliation inflicted in September on UAE Energy Minister Suhail Al-Mazrouei by his Saudi counterpart.

The UAE seems to feel aggrieved that it’s making deeper cuts than everyone else. Officials support that complaint by comparing the country’s output target with its production in April, the month the deal was hammered out.

But that’s a cheap shot. April was when everybody opened the taps in a damaging free-for-all. None of the output targets was based on those levels. Plus, the UAE agreed to its baseline when it signed up to the deal, so it’s a bit rich to start quibbling about it seven months later.

Revisiting the UAE’s target would open up a can of worms. Iraq wants special treatment too, because of its costly fight against the so-called Islamic State. Nigeria wants some crude reclassified to remove it from its quota. Considering everyone’s grievances would set in motion a rapid unravelling of the entire OPEC+ deal.

It’s unlikely, but not impossible, that the UAE would decide to quit OPEC. Others have done so — some repeatedly — and the country doesn’t have the moral handcuff of being a founding member of the group. The political and economic stakes would be high though. In one stroke such a move would destroy the goodwill between the UAE and Saudi Arabia, which could prove costly.

After a day of public silence following the press reports, Mazrouei on Thursday said the UAE “has always been a committed member” of OPEC. The statement sounded very backward-looking and avoided any denial that it was reconsidering its membership.

Even if the issue blows over, it serves as a reminder of the fractures within the producer group ahead of a decision that will determine the course of oil prices in the coming months.

But if it doesn’t, other countries would certainly follow in ending production restraint. The impact of an extra 1.6 million barrels a day of UAE crude might not be catastrophic for oil prices, but add another 7 million barrels from the rest of the group and March’s price collapse to just below $20 a barrel would look positively benign.

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22 Comments on "Could OPEC’s House of Cards Collapse?"

  1. makati1 on Sun, 29th Nov 2020 5:05 am 

    “CASES!”
    “Killing Grandma!”
    “CASES!”
    “Killing Grandma!”
    “CASES!”
    … and on and on with the MSM brainwashing, mostly in the West. .

    The flu bullshit is easing up here and masks are disappearing. I’m waiting to see if the powers that be here are up to trying to kill the Christmas celebrations in an 85% Catholic country.

  2. doug nicodemus on Sun, 29th Nov 2020 9:21 am 

    what a dumb ass…do you think often or just once in awhile…

  3. zero juan on Sun, 29th Nov 2020 10:06 am 

    Hey Dougee, STFU, we know you are not REAL!

    doug nicodemus said what a dumb ass…do you think often or just o…

  4. supertard doug nicodemus do u love supremacist muzzies i tell u we all have muzzcoq in our mouth and suckle milk out of it actually do you know im the first to ask for aputation of whitey supertard atheistic scientific supremacist thunderf00t on Sun, 29th Nov 2020 10:42 am 

    when this whitey supertard went on self imposed quarantine during first week of convict-19 back in march i said it smells

    ask urself if someone speak exclusively high british english does he love muzzies of course he does

    thansk for speaking low english

  5. dratrepus tak supertards pls change ur undies after 5 days on Sun, 29th Nov 2020 11:03 am 

    convict-19 is killing us all the death rate after turgid is 2^N where N is 18 years to type

    now the death rate is 2^N where N tapes 200 years to type. at this rate whitey supertards will be extinct soon.

    isn’t it ironic they reject invisible (((supremetard))) but go all in for invisible (((convict-19)))

  6. FamousDrScanlon on Sun, 29th Nov 2020 12:13 pm 

    JuanP, stop the shit. We are tired of this stupid ID’s you come up with. What a dumbfuck!

    dratrepus tak supertards pls change ur undies after 5 days said convict-19 is killing us all the death rate after…

    supertard doug nicodemus do u love supremacist muzzies i tell u we all have muzzcoq in our mouth and suckle milk out of it actually do you know im the first to ask for aputation of whitey supertard atheistic scientific supremacist thunderf00t said when this whitey supertard went on self imposed qu…

  7. dratrepus tak supertards pls change ur undies after 5 days Y whitey supertard president john brennen is a muzzie lover because he "reverted" to a 7th century supremacist muzzies bag day feb1 2021 thats why on Sun, 29th Nov 2020 12:21 pm 

    supremacist muzzkarens are worshippers of pedifiler muhammad who rubbed his peen on aisha’s peen when she was 6.

    yeah that’s muzzteaching look it up

  8. FamousDrScanlon on Sun, 29th Nov 2020 12:54 pm 

    JuanP can’t see are comments, stupid fuck. Cus JuanP has us on ignore. dumbass

  9. zero juan on Sun, 29th Nov 2020 1:11 pm 

    Your not famous FamousDrScanlion. cuntface
    GOT IT!!

  10. zero juan on Sun, 29th Nov 2020 1:14 pm 

    ROFLOL, Ppeee juan, are you a widdle upset? You are appearing that way. Doesn’t it suck to be trolled, troll. Expect lots more FOOOOL

    zero juan said Your not famous FamousDrScanlion. cuntface GOT IT!…

    FamousDrScanlon said JuanP can’t see are comments, stupid fuck. Cus Jua…

    dratrepus tak supertards pls change ur undies after 5 days Y whitey supertard president john brennen is a muzzie lover because he “reverted” to a 7th century supremacist muzzies bag day feb1 2021 thats why said supremacist muzzkarens are worshippers of pedifile…

  11. zero juan on Sun, 29th Nov 2020 1:30 pm 

    Are bum hurts.

  12. REAL Green on Sun, 29th Nov 2020 1:37 pm 

    So true widdle. So true.

    are bum hurts. REAL Bad

  13. zero juan on Sun, 29th Nov 2020 1:52 pm 

    Ppeee juan, you just said you could not see REAL Green but then you post a fake REAL Green. Could it be you are a widdle upset, Ppeee fuck? LOL. Ppeee, everyone knows REAL Green is on the moderated side only and this is where he kicks your ass in debates and wipes your comments off the board. LMFAO @ the FOOOL. It is delicious when you get upset Ppeee juan

    REAL Green said So true widdle. So true. are bum hurts. REAL Bad…

  14. dratrepus tak supertard kat i admire your intelligence and logical consistency you dont believe in invisible (((supermetard))) all fine and good and you dont believe in invisible (((convict-19))) either ah thats where it sets you apart from the on Sun, 29th Nov 2020 4:28 pm 

    casual hacks who can’t make it

    take for example supremacist goat he doesn’t believe in invisible (((supremetard))) but he believes in invisible (((convict-19))) ironic

    i give credit where credit is due supertard kat

    supertard doug nicodemus is the same way
    this supertard doesn’t believe in invisible (((supremetard))) but he belives in invisible (((convict-19))) hahah the irony

  15. REAL Green on Sun, 29th Nov 2020 4:36 pm 

    We hate you zero juan!

    fuckwak.

  16. Davy on Sun, 29th Nov 2020 4:37 pm 

    So true REAL Greenie. So true.

    We hates zero juan. REAL Bad like.

  17. zero juan on Sun, 29th Nov 2020 4:46 pm 

    poa widdle Ppeee juan is very upset. He used Davy and REAL Green as if anyone gives a shit. Ppeee fuck, nobody cares about you and your puke, Fuck. I am taking you down asswipe, one day at a time. Be Davy or REAL Green when ever you like. I could give a shit Ppeee fuck.

    Davy said So true REAL Greenie. So true. We hates zero juan….

    REAL Green said We hate you zero juan! fuckwak.

    dratrepus tak supertard kat i admire your intelligence and logical consistency you dont believe in invisible (((supermetard))) all fine and good and you dont believe in invisible (((convict-19))) either ah thats where it sets you apart from the said casual hacks who can’t make it take for exam…

  18. zero juan on Sun, 29th Nov 2020 4:47 pm 

    Ppeee, WTF is a dratrepus tak? Dumbfuck. You are a clown Ppeee fuck and dumb as a box of rocks.

  19. dratrepus tak supertard kat i admire your intelligence and logical consistency you dont believe in invisible (((supermetard))) ok you dont believe in invisible (((convict-19))) either ah thats where it sets you apart from the other hacks on Sun, 29th Nov 2020 6:50 pm 

    supertards please change ur undies after 5 days

  20. REAL Green on Sun, 29th Nov 2020 8:08 pm 

    Everyone in the hole wide world no’s DrScanlons apeman zero juan. And that he’s famous. Cept fer us. Cus were a lunatic.

    fuck wack

  21. Davy on Sun, 29th Nov 2020 8:48 pm 

    Fuck wak only has one c in it REAL Green

    cuntface

  22. zero juan on Sun, 29th Nov 2020 8:50 pm 

    So true widdle. So true.

    luantic

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