00:00The United Arab Emirates officially leaves OPEC this Friday, marking a major realignment not just in energy policy, but in
00:09the region's geopolitics.
00:10Analysts say UAE's departure signals a shift towards a more independent foreign policy, one that prioritizes national interests over the
00:20collective goals of the group.
00:23I think in the Middle East, what we're seeing is a realignment, a geopolitical realignment, where Saudi Arabia, Pakistan, Egypt
00:31and Turkey are grouping themselves as the new guarantors of the energy security and security in general of the Middle
00:38East, while the UAE is linking much closer to India, to Israel and with the U.S.
00:47And that realignment, geopolitical realignment in the Middle East is also visible in the fact that the Minister of Energy
00:57in the UAE mentioned that Saudi Arabia was not consulted.
01:03So I think that really shows how these two countries are falling apart.
01:07Let's not forget that at the beginning of the year, they also had a little row over the implications in
01:13Yemen as well.
01:15So this really shows the deep separation between those two countries at the moment from the geopolitical point of view.
01:24The move is a reflection of the UAE's desire to maximize its production capacity without constraints from OPEC.
01:30Currently, the UAE can produce up to 4.85 million barrels per day, but it is often kept between 3
01:37to 3.5 million barrels per day due to OPEC agreement to maintain price floor.
01:42There are two theories here.
01:44The first theory says that the UAE, once the Strait of Hormuzh reopens, whenever that happens, wants to have enough
01:52capacity to ramp up production and make up for all the losses.
01:56That's one theory, very focused on the short term.
01:59And the other theory is more focused on the long term, which is that we know that oil demand is
02:05going to peak sometime soon in the next few years and that it will start decreasing quite fast in the
02:1130s or in the 40s, depending on the outlook.
02:13So that means that countries have the incentive to monetize resources as fast as possible.
02:20Those countries that can and the UAE is one of those countries.
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