World oil prices collapsed after The Wall Street Journal published about the possible withdrawal of the United Arab Emirates from OPEC. In this respect to witness trade data.
The price of Brent oil, which was trading in the region of $ 84 per barrel all day on March 3, fell more than 2.5% to $ 82.6 per barrel, with deliveries in May on the London ICE stock exchange at 17.00 Moscow time. Futures later rebounded the dip and at 19.45 Moscow time they were already valued at $85.3.
On the New York Stock Exchange, the US benchmark WTI price also fell. The price of April futures contracts, which cost around $78 a barrel on Friday, fell to $76.3 (-2.1%). Three hours later, they were already trading at almost $79 a barrel.
Analysts cite data from the American Petroleum Institute, which reported on March 3 that US strategic reserves increased by 6.2 million barrels the previous week, as another reason for the decline in world raw material prices.
Quotations began to fall after the publication of the WSJ article, which referred to the intensifying conflict between the UAE and Saudi Arabia over oil. The newspaper noted that Saudi Prince Mohammed bin Salman did not attend the Middle East leaders’ summit held in Abu Dhabi in January. He deliberately avoids joint events with UAE President Sheikh Mohammed bin Zayed al-Nahyan, according to the publication.
According to the newspaper, Abu Dhabi is dissatisfied with OPEC’s current policy, in which Riyadh plays a key role.
“Saudi Arabia and the UAE, still technically allies, have been divided on many fronts, competing for foreign investment and influence in global oil markets, and clashing amid the burgeoning war in Yemen. Disputes that were once waged behind closed doors are now spreading more and more, threatening to reorganize alliances in the energy-rich Persian Gulf, as Iran seeks to increase its influence in the region and Russia’s war in Ukraine raises oil prices and prompts new deals to be accepted. New decisions by OPEC,” the publication says.
Familiar with the situation, WSJ interlocutors said the UAE national security adviser had repeatedly traveled to Saudi Arabia to meet with the crown prince, but that this did not help de-escalate tensions between the two countries. At the same time, the publication notes that earlier the Emirati sheikh was seen as the mentor of the Saudi prince, but later his views diverged due to different views on politics in the Middle East.
Citing unnamed Emirati officials, the WSJ said it was not satisfied with the UAE authorities’ obligation to reduce raw material production as per the OPEC decision, given the country’s high production capacity. And now there are internal discussions in the government about a possible withdrawal from the organization of oil-exporting countries.
According to the publication, the potential withdrawal of the UAE from OPEC shocks the cartel and undermines its influence in world markets. At the same time, WSJ sources pointed out that Abu Dhabi’s withdrawal from the organization has been discussed for many years and did not lead to any concrete steps. But the current disagreement with Riyadh has revived this idea.
The newspaper also reported that although the United Arab Emirates officially supports the current OPEC policy of reducing oil production, they privately told US officials that they want to increase production in line with Washington’s wishes. Since then, the UAE has tried in every possible way to defend its right to increase oil production before other members of the cartel.
At the same time, the publication conveys to analysts that the conflict between the two largest oil producers in the world is not so serious – the UAE and Saudi Arabia continue to participate and actively conduct joint exercises, although the best days of their union are over. contacts at ministerial level.
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.