A rapprochement between Israel and the UAE came earlier this year in a blockbuster deal that made Trump look pretty good, even if it was heralded by Israel's new-found hydrocarbon power, which is subtly reordering alliances across the Middle East. If you need more proof of that, look to quiet talks now ongoing between Israel and the UAE for oil and gas sector cooperation.
Israel is now a gas exporter, and the UAE is throwing its weight around a bit as OPEC's third-largest oil producer (even if that weight-throwing led to dramatic talk of OPEC disunity leading to its disintegration). Part of that cooperation will deal with an oil pipeline between the Red Sea and the Mediterranean, adding further fuel to the fires of a brewing Mediterranean oil war against an increasingly isolated Turkey and its on-again, off-again allies.
At the same time that Israel is throwing its natural gas weight around, UAE's state-run ADNOC is working hard towards expansion, most recently awarding oil exploration rights to OXY to expand output.
To most, it signals more disunity to come within the moving walls of OPEC, or rather, OPEC+.
The problem is that the three countries really carrying the burden of making production cuts in the name of stabilizing the market (Saudi Arabia, the UAE, and Russia), aren't really getting much out of their high-level status. But at the same time, it's hardly the latest round of cuts or the extension of cuts, that has contributed to the recent…
A rapprochement between Israel and the UAE came earlier this year in a blockbuster deal that made Trump look pretty good, even if it was heralded by Israel's new-found hydrocarbon power, which is subtly reordering alliances across the Middle East. If you need more proof of that, look to quiet talks now ongoing between Israel and the UAE for oil and gas sector cooperation.
Israel is now a gas exporter, and the UAE is throwing its weight around a bit as OPEC's third-largest oil producer (even if that weight-throwing led to dramatic talk of OPEC disunity leading to its disintegration). Part of that cooperation will deal with an oil pipeline between the Red Sea and the Mediterranean, adding further fuel to the fires of a brewing Mediterranean oil war against an increasingly isolated Turkey and its on-again, off-again allies.
At the same time that Israel is throwing its natural gas weight around, UAE's state-run ADNOC is working hard towards expansion, most recently awarding oil exploration rights to OXY to expand output.
To most, it signals more disunity to come within the moving walls of OPEC, or rather, OPEC+.
The problem is that the three countries really carrying the burden of making production cuts in the name of stabilizing the market (Saudi Arabia, the UAE, and Russia), aren't really getting much out of their high-level status. But at the same time, it's hardly the latest round of cuts or the extension of cuts, that has contributed to the recent increase in oil prices: For that, we largely have vaccine-based sentiment to thank. If the Saudis have been a bit overly optimistic about the pace of vaccine-driven oil demand recovery, then speculators have been even more so. This isn't going to happen overnight.
Still, that does not indicate the end of OPEC. More likely to come first is a war over the natural resources of the Eastern Mediterranean (think: Cyprus, Egypt, Greece, Israel, Syria, Libya, Lebanon (for good measure), and Turkey, with all the respective allies in the mix. OPEC, while increasingly irrelevant, will not simply and dramatically disintegrate because the UAE is tired of shouldering the stabilization burden to the extent that it is while other countries play fast and loose with quotas. What's more likely to happen are slow adjustments. It worked with adding Russia into the OPEC equation with very little fanfare. Expect more of this. The addition of Russia would mean the departure of the UAE would somewhat balance out to the pre-OPEC+ days.
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