What Does The End Of OPEC Mean For The Iran War And Global Energy Prices?

Did the UAE just trigger a once in a century shift in global energy markets? The United Arab Emirates on Tuesday said it was quitting OPEC by May 1st after 60 years as a member, dealing a blow to the cartel ​as the Iran war exposes discord among Gulf nations and Iran. The exit of the UAE, one of the group’s biggest producers with 15% of total exports, weakens ‌OPEC’s control over global oil supplies and widens a rift between the UAE and Saudi Arabia. Furthermore, the dissolution of OPEC greatly hinders Iran’s ability to wield oil exports as economic leverage in the future. The name of the game for OPEC is zero competition and artificial supply scarcity. OPEC was formed in the 1960s as a trade consortium of oil producers but it became an economic weapon in the 1970s to maintain pressure on the US and any other nations providing aid to Israel. This led to a stranglehold on 40% of the global oil supply and an initial explosion in gas inflation. Prices quadrupling at the pump, feeding into a decade long stagflation event. Restricted exports became the status quo, and higher prices the norm in the decades since (with […]