\

UAE Leaves OPEC and OPEC+

228 points - today at 1:13 PM

Source
  • bluGill

    today at 3:09 PM

    OPEC has long been Saudi Arabia reducing output, and everyone else selling everything they can. They haven't had much power since the 1970s, but that they exist means they are a threat that if everyone else actually stuck to the agreement for a change.

    This is the common problem for cartels: everyone has inventive to cheat on the deals made. By selling a little more than your share you get more money, while because everyone else is following along the prices are higher. (see also prisoners dilemma)

      • api

        today at 3:49 PM

        Tangent but: this is also why reducing greenhouse gas emissions is hard.

        As long as fossil fuels remain one of the cheapest easiest to scale ways to make power, there’s a similar incentive to cheat. If everyone else cuts emissions and you don’t, your margins are higher and you can undercut them. Global reductions require an all-cooperate scenario.

        Developing nations have the strongest incentive to cheat since they need those margins to catch up.

        Which is why I think little progress will be made until other sources are actually cheaper. Until then it’s beyond us politically. We can’t get all nations across the world to simultaneously cooperate at that scale.

          • jagraff

            today at 3:59 PM

            Agreed - the good news is, in many circumstances renewable energy is cheaper for new energy capacity. As long as regulations move in the right direction, we are likely to see the global energy mix move towards renewable sources over time

              • don_esteban

                today at 4:07 PM

                Not only is the renewable energy cheaper, it also raises energy independence, which turns out to be quite relevant in today's world.

                Furthermore, it also reduces the drain on the (often very fragile, for thirld world countries) foreign reserves, especially relevant when the oil prices fluctuate wildly.

                If your solar panels are old and you don't have money to replace them, you get slightly less electricity. If you are out of gasoline/diesel and you have no money to buy it, you have a big, big, problem.

                • Muromec

                  today at 4:39 PM

                  it doesn't have to be cheaper to be a problem, as long as somebody still makes money on it and corruption still exists.

                  And corruption is one of those annoying problems that dont go away easy

              • debo_

                today at 4:34 PM

                There are economic mechanisms for this (e.g. https://en.wikipedia.org/wiki/EU_Carbon_Border_Adjustment_Me...) but broadly, yes, it is difficult.

                • skybrian

                  today at 4:38 PM

                  Isn’t solar already cheaper?

              • watwut

                today at 3:49 PM

                Saudi are staying and UAE is leaving because they want to pump more.

                • sarjann

                  today at 4:01 PM

                  Isn't the solution in game theory when there are multiple turns to just repeat the move the previous person made.

                  So if the other side overpumped by x1 amount then you pump an extra x1 the next turn / year (maybe multiplied some reference production factor as they don't all have the same absolute limits).

                    • nradov

                      today at 4:44 PM

                      Simple game theory doesn't work in the real world. In the short term most OPEC+ members other than Saudi Arabia have very limited technical ability to significantly increase or decrease production. It's not like they have a big valve that they can open or close at will. For many oil wells, restricting flow would actually damage the geologic substrate. And drilling new wells (including all of the supporting infrastructure) can take years.

                      • Ampersander

                        today at 4:33 PM

                        Then they all pump more every year

                    • asah

                      today at 3:48 PM

                      -1: modern oil is operating at a scale where cheating is easy to catch. You'd need MMs per day barrels to move the needle.

                      https://chatgpt.com/share/69f0d6a3-3f2c-83e8-a944-094d84e155...

                  • cmiles8

                    today at 2:38 PM

                    The US has long sought to erode OPEC’s ability to dictate global oil prices. The US has made massive progress in being broadly energy independent to isolate it from challenges elsewhere. The US has been a net energy exporter since 2019. Global oil pricing was always an annoying thorn in that strategy.

                    This is an initial but big crack in shaking up global oil markets in a way that meaningfully shifts global power dynamics.

                      • kybb4

                        today at 3:30 PM

                        They export because their own refineries along the Gulf coast esp were designed for middle east heavy crude cuz the US once upon a time believed it was about to run out of American light sweet crude. So the story is not black and white.

                        • melling

                          today at 3:07 PM

                          Cheap and plentiful fossil fuels.

                          We’re rolling back CAFE standards too.

                            • nradov

                              today at 3:14 PM

                              CAFE standards were always a stupid idea. If we want to reduce fuel usage then increase the tax on fuel instead of punishing manufacturers for selling vehicles that consumers want to buy.

                                • amiga386

                                  today at 4:40 PM

                                  Vehicle emission and fuel efficiency standards are a great idea. The stupidity was allowing a "light truck" exception at all. It made the manufacturers turn to manufacturing and promoting what should be work vehicles to rich idiots who need nothing larger than a regular car (but can easily be upsold on something they don't need)

                                  America is already fucked, given how awful its urban sprawl is. Trucks used for commuting and not haulage just makes it double fucked.

                                  • post-it

                                    today at 3:45 PM

                                    This is, respectfully, corporate propaganda. Consumers buy the vehicles that are available and advertised. It's in the best interest of manufacturers to convince/compel consumers to buy larger, more expensive vehicles with higher margins, and that's exactly what they're doing.

                                      • stickfigure

                                        today at 4:28 PM

                                        If gasoline is more expensive, customers will demand more efficient vehicles.

                                        We aren't mindless zombies buying whatever we see on TV. I'm old enough to remember when Japanese small cars practically took over the market in the 70s and 80s due to gas price shocks. It can happen again.

                                          • debo_

                                            today at 4:35 PM

                                            Tell that to the literal constant flow of old men I see driving pristine F150s in the metropolitan center of the Canadian city I live in.

                                        • ndisn

                                          today at 3:56 PM

                                          You can’t convince (almost all) consumers to spend money on something that they do not want.

                                            • post-it

                                              today at 4:00 PM

                                              Of course you can. And for the rest, you just discontinue the product they want so they have no choice.

                                              • adrianN

                                                today at 4:17 PM

                                                You can make them want things. Ad money is what powers some of the most successful companies.

                                                • tyre

                                                  today at 4:06 PM

                                                  You can, but it’s easier to convince them to want something that they don’t need or is actively harmful.

                                                  • iso1631

                                                    today at 4:19 PM

                                                    That's the entire point of the trillion dollar advertising industry

                                                • nradov

                                                  today at 3:56 PM

                                                  Bullshit. There are many competing auto manufacturers. No one is compelled to buy larger, more expensive vehicles. There are smaller, cheap vehicles available to those who want them. If I want a little penalty box like a Hyundai Elantra or Nissan Sentra the local dealers have base models in stock and ready to sell today.

                                                  Larger vehicles are more comfortable, safe, and practical (for anyone who doesn't need to worry about parking issues). It doesn't take advertising to convince consumers about that, it's just reality.

                                                    • post-it

                                                      today at 3:59 PM

                                                      A Hyundai Elantra of today is significantly bigger than it was ten years ago. It also used to be the second-tier model above the Accent, which was discontinued.

                                                      Ditto with the Sentra and the Versa.

                                                      This is my point exactly.

                                                      • linkregister

                                                        today at 4:24 PM

                                                        Pedestrian deaths, including children, have risen in lockstep with light truck adoption in the United States, while they have fallen in countries without this phenomenon.

                                                          • stickfigure

                                                            today at 4:33 PM

                                                            It isn't about weight, it's way stupider than that: https://www.youtube.com/watch?v=YpuX-5E7xoU

                                                            Tall grilles are a purely aesthetic choice. We could create safety standards for pedestrian impacts and end this inane trend. And still drive trucks!

                                                        • jagraff

                                                          today at 4:02 PM

                                                          Large vehicles are safer for the occupants of the vehicle, however they do increase danger for pedestrians and drivers of other vehicles in a collision. There is a reasonable argument that reducing vehicle size would save lives overall

                                                          • Tangurena2

                                                            today at 4:15 PM

                                                            Domestic manufacturers used to build & sell compact pickup trucks. Nowadays, the only pickups on the market are huge fatmobiles. The profit margin in trucks is much higher than the profit margin on passenger cars.

                                                              • nradov

                                                                today at 4:23 PM

                                                                You can buy a Ford Maverick compact pickup truck from your local dealer today.

                                                                The profit margins on larger trucks are higher precisely because that's what consumers want. No one is forcing them to buy those vehicles.

                                                            • adrianN

                                                              today at 4:19 PM

                                                              The VW Up electric sold really well but was discontinued.

                                                              • today at 4:19 PM

                                                        • bee_rider

                                                          today at 4:21 PM

                                                          What if consumers want to buy Chinese electric cars? Are we going to remove that bit of protectionism?

                                                            • today at 4:25 PM

                                                          • a_random_name

                                                            today at 3:45 PM

                                                            Yeah, but "increasing taxes" always rouses the rabble.

                                                        • the_sleaze_

                                                          today at 3:48 PM

                                                          Always gonna happen. Oil margins are gigantic and they'll use every dime of runway they can. Electric is better in every single way and batteries tech is only making that more true every day. The dinosaurs won't go quietly into the night.

                                                      • ch4s3

                                                        today at 2:51 PM

                                                        I think the initial crack was ousting Maduro in Venezuela. Since OPEC exempts Venezuela from production caps, it gives the US government a lever on non US production.

                                                          • Tangurena2

                                                            today at 4:25 PM

                                                            Venezuela produces heavy "sour" crude (this means high in sulfur). Many of the US refineries capable of handling sour crude have closed, partly because the sulfur content makes the refineries stink (and emit lots of pollution) and partly because they need more expensive piping to handle the corrosive materials (not just the crude, but HF acid that's used in the refining process).

                                                            The last refinery to be built in the US opened in the 1970s. Since then, refineries have closed. None of the owners of refineries will sell them because of SuperFund legislation. It is the same reason that when a gas station is sold, the fuel tanks are dug up and replaced. This way, there's no way to claim that the previous owner left hazardous material to be cleaned up. SuperFund laws say that every previous owner is liable for the cost of cleanup. It doesn't matter how long ago the property was sold.

                                                        • tootie

                                                          today at 3:22 PM

                                                          Global pricing affects all fossil fuels and always will. Energy independence will remain a fantasy until we are fully on renewables. Which is entirely within reach and requires fighting zero wars.

                                                            • glitchc

                                                              today at 3:45 PM

                                                              It's the other way around: Renewables will remain a fantasy until we achieve energy independence.

                                                                • blackcatsec

                                                                  today at 3:56 PM

                                                                  When it comes to fossil fuels, there's no such thing as 'energy independence' because fossil fuels are traded on a global market. In addition, not all oil is the same. So you have to trade it because what you can extract may not be what is useful to you, but useful to someone else.

                                                                  In short, the US cannot functionally be independent on fossil fuels even if we extracted every drop of oil within our borders--because we literally cannot use all of it, and most of it would be wasted just sitting around.

                                                                  • tootie

                                                                    today at 3:53 PM

                                                                    That makes no sense at all. We just had a post about several countries with energy independence who had done it with zero extractable resources. For them, the magic key was having tons of hydro and a small population. They just stopped importing. Countries like the US will need a lot more power and a lot more diversity of generation but it can be done if there was enough will to do it.

                                                                • nine_k

                                                                  today at 3:28 PM

                                                                  The US, or Saudi Arabia, or Venezuela, or Russia could very well be energy independent on fossil fuels alone, even though that won't be wise.

                                                                  Europe, or China, or India could not though.

                                                                    • don_esteban

                                                                      today at 4:19 PM

                                                                      China is making great strides in renewables and investing in nuclear (and in electrification of transport). It can be energy independent in not too distant future.

                                                                      India has geography for solar, and the human/industrial capability for nuclear.

                                                                      Southern Europe can go solar as well.

                                                                      Northern Europe has it tougher (except Norway, with its abundant hydro). Nuclear could work. Or long range DC cables from South Europe or North Africa (if ever Europe helps them to put their act together - not easy or fast, but definitely in their best interest).

                                                                      • tootie

                                                                        today at 3:50 PM

                                                                        How? Being a net exporter implies we make more than we use. Great. How do we force companies to not export until domestic demand is met? And how do we ensure that doesn't raise prices more than just running the system as-is?

                                                                          • nine_k

                                                                            today at 4:23 PM

                                                                            If foreign supply is cut, we (assuming the US) can still do fine, even though is a sub-optimal way. The US crude is heavy, the Middle Eastern crude is light, so oil processing would need to adapt, the efficiency would go down, and prices would go up. But we'd still be up and running independenty.

                                                                            If foreign oil supply were cut from China or India, they'd be in a much bigger trouble.

                                                                            • adrianN

                                                                              today at 4:21 PM

                                                                              Self sufficiency generally comes at a cost. The whole promise of globalization is that it makes things cheaper.

                                                              • iLemming

                                                                today at 2:43 PM

                                                                "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, and my grandson is going to ride a camel". Sheikh Rashid bin Saeed Al Maktoum, the former Emir of Dubai.

                                                                  • RobRivera

                                                                    today at 3:06 PM

                                                                    Its a fun line, but the volume of money they have and the way its managed says they are looking at retaining that wealth somehow

                                                                      • bluGill

                                                                        today at 3:17 PM

                                                                        Money retrained means nothing when cheap oil is gone. Cars are only a thing because we have volumes and energy for large supply chains and scale. A rich person can afford a model-T level car, but large parts of what makes a luxury car are things that they won't be able to get at any price without modern industry that is built on distributed wealth for many people. All the electronics - needs industry. Precision manufacturing - depends on precision electronics. You can't even rebuild a current design if someone thinks to print out the blueprints.

                                                                        Of course who knows how to end of oil will happen. Best case is a switch to renewables (or fission...) in which case there will be more than enough expensive oil for a few rich people to drive expensive gas cars if they want to. There are lots of other options as well, only time will tell.

                                                                        (and a nod here to the replies who suggest this was never actually said)

                                                                          • nine_k

                                                                            today at 3:49 PM

                                                                            Petromonarchies invest a lot into alternative asset classes: semiconductor industry, logistics and shipping, power electric machines, biomedical development, etc. Renewables are in the list, too.

                                                                        • bawolff

                                                                          today at 3:30 PM

                                                                          Well yes, that is because they have heard the line and took it as a warning.

                                                                          However just because they are trying doesn't mean they will succeed. Their attempts at diversification still seem very reliant on oil money, and its far from clear that they will eventually be able to stand on their own.

                                                                          • the_mitsuhiko

                                                                            today at 3:36 PM

                                                                            Money solves a lot, but not everything. At the end of the day it's still a country in a desert. Unfortunately that entire region is a repeating history of temporary wealth and stability that gives way to instability. When that happens the underlying constraints can quickly reassert themselves. Just luck at the history of Kuwait.

                                                                            • post-it

                                                                              today at 3:47 PM

                                                                              Retaining wealth is the easy part, retaining political power is hard. They don't want to be regular jetsetting billionaires, they want to rule their own domain. And in order to do that, they need to figure out how to make people want to keep living there.

                                                                              • bpt3

                                                                                today at 3:59 PM

                                                                                The point of the line is not that they aren't going to try, it's an acknowledgement of the extreme challenge in diversifying in the short term and incentivizing the next generations who are very, very comfortable with the status quo to build other income streams in the long term.

                                                                            • gnfargbl

                                                                              today at 3:16 PM

                                                                              Where is the Land Rover supposed to sit on this scale?

                                                                              There are current Land Rovers with market positioning suggesting they're "better" than Mercedes, and there are historic Land Rovers which were arguably not much better than camels.

                                                                                • nine_k

                                                                                  today at 3:31 PM

                                                                                  To my mind, it's still an automobile, but not a posh one. It's like "I wear a suit with a necktie, but my son wears fatigues".

                                                                                  • iLemming

                                                                                    today at 3:29 PM

                                                                                    That's a quote. You may want to ask Sheikh Mohammed (current ruler of Dubai) for why his dad was mocking him for his choice of a car. I just posted the quote - felt relevant.

                                                                                    • Grimburger

                                                                                      today at 3:38 PM

                                                                                      Only a little bit of time in the ME but the Land Rover is likely considered higher status.

                                                                                      Camels are cool still.

                                                                                      • oniony

                                                                                        today at 3:44 PM

                                                                                        And where is the Jaecoo?

                                                                                    • today at 3:08 PM

                                                                                  • netdur

                                                                                    today at 2:24 PM

                                                                                    Geopolic: A US-aligned Gulf state walking away from a Saudi/Russia-led bloc in the middle of a war, after deciding the bloc didn’t really have its back

                                                                                    Economic: it weakens OPEC’s pricing power in a way you might not see right away if Hormuz is closed, but it could really change the supply picture once things reopen

                                                                                      • Havoc

                                                                                        today at 2:29 PM

                                                                                        UAE announced this week they might start selling oil in yuan so this doesn’t read like anything US aligned to me. If anything it reads like the opposite to me - a move away from traditional opec petrodollar system

                                                                                          • eightysixfour

                                                                                            today at 2:55 PM

                                                                                            > UAE announced this week they might start selling oil in yuan

                                                                                            That is just UAE pressure to make sure they get their dollar swap deal: https://www.reuters.com/world/middle-east/trump-says-currenc...

                                                                                              • Havoc

                                                                                                today at 3:00 PM

                                                                                                Indeed it’s leverage but at same time they only need the swap because all is not well in petrodollar land.

                                                                                                  • eightysixfour

                                                                                                    today at 3:15 PM

                                                                                                    I don't think there is any evidence that they actually need the dollar swap line - the dirham-dollar peg isn't at any risk and they have plenty of money for fiscal flexibility going into the foreseeable future. If you take financial reasons off of the table then it is clear it is just a political play for a bigger seat at the table with the US.

                                                                                                    The Saudis did it to Biden in 2023, the UAE sees the opportunity to do it to Trump now.

                                                                                            • nimbius

                                                                                              today at 2:33 PM

                                                                                              exactly. this sounds like a third path where the UAE charts its own course, and that course increasingly looks paved in Yuan.

                                                                                              OPEC cartel membership didnt gain it access to Hormuz, and the US petrodollar promise to protect UAE states from aggression in exchange for trade in USD could not be upheld.

                                                                                                • ericmay

                                                                                                  today at 3:01 PM

                                                                                                  > the US petrodollar promise to protect UAE states from aggression in exchange for trade in USD could not be upheld

                                                                                                  Well the war is still ongoing, and Iran's regime is already feeling the pain of the blockade [1]. Pricing oil in Yuan because, I guess, the US is somehow not protecting the UAE doesn't make sense because China won't be there to protect them either. The US can just say, well fine you can sell your oil in Yuan. But we'll just blockade the Straight and seize oil priced in Yuan or something. Who exactly does the UAE need protection from? Iran? China's ally?

                                                                                                  I swear I read this same story over and over again. There's always just an accusation "thing happened, here's how the US is now in a state of being screwed" and there's just never any follow-up or perhaps imagination that the US could just do something too. Hypersonic missiles? US Navy is done for, no possible counter. Iran has drones? Boom. US is done for no way they can spend Patriot missile money on $30,000 Iranian drones. Nope, nothing anyone can do at all. Iran "closes the Straight", well the US can't do anything. Now they are "embarrassed" and "slammed".

                                                                                                  > OPEC cartel membership didnt gain it access to Hormuz

                                                                                                  What does this mean?

                                                                                                  [1] https://www.wsj.com/world/middle-east/iran-is-flooded-with-s...

                                                                                                    • nimbius

                                                                                                      today at 3:57 PM

                                                                                                      > Pricing oil in Yuan because, I guess, the US is somehow not protecting the UAE doesn't make sense because China won't be there to protect them either.

                                                                                                      It is an admission that US protection was always a paper tiger. Perhaps in the 1960s it meant something, but Iran has shattered the illusion that Washington has any credible defense of the country.

                                                                                                      > The US can just say, well fine you can sell your oil in Yuan. But we'll just blockade the Straight and seize oil priced in Yuan or something.

                                                                                                      The UAE primarily sells its oil to China, which is its largest export partner, followed by countries like India and Japan. the United States cannot do this without not only obliterating energy markets for an ally, but strengthening alliances between china and india. It is likely that should the US attempt such a move, China would respond with retaliatory technology tariffs and a reduction of agricultural trade.

                                                                                                      > Who exactly does the UAE need protection from? Iran? China's ally?

                                                                                                      the UAE did not "need protection" from any regional military threat until the United States used regional peace talks as cover to launch a surprise attack against Iran. the UAE would still likely be an OPEC member state had the US not unilaterally chosen to obliterate global energy markets for no consistent or clearly defined reason.

                                                                                                      > there's just never any follow-up or perhaps imagination that the US could just do something too.

                                                                                                      This conflict was well defined as geopolitical suicide for nearly forty years; its what kept the peace. All simulations and tabletop exercises predicted such an incursion would send global energy markets into panic, trade markets into recession, and produce no meaningful advancement of either regional security or regime change. Iran is backed by powerful allies and has shown numerous times it can meet each US escalation with yet more regional attacks. We have tried escalation and failed, burned through a decade of advanced missiles fighting cheap drones, and have no defined objective politically or militarily for this conflict.

                                                                                                        • ericmay

                                                                                                          today at 4:14 PM

                                                                                                          > It is an admission that US protection was always a paper tiger. Perhaps in the 1960s it meant something, but Iran has shattered the illusion that Washington has any credible defense of the country.

                                                                                                          sigh No, it's not. There are 3 aircraft carriers parked in the region, plus US air bases. Iran launched over 2500 missiles at the UAE alone. The US destroyed much of Iran's military, the only thing they have left is the ability to launch missiles and drones at ships or do terrorist style attacks.

                                                                                                          But if you want to suggest that the US is a paper tiger here, that just makes everyone a paper tiger. Nobody can stop Iran. Ok.

                                                                                                          > The UAE primarily sells its oil to China, which is its largest export partner, followed by countries like India and Japan. the United States cannot do this without not only obliterating energy markets for an ally, but strengthening alliances between china and india. It is likely that should the US attempt such a move, China would respond with retaliatory technology tariffs and a reduction of agricultural trade.

                                                                                                          Then we would react with export controls, additional weapons shipments to allies in the region, work with Japan and South Korea to start weapons programs, blockade Chinese trade, there's a million things we can do too.

                                                                                                          > the UAE did not "need protection" from any regional military threat until the United States used regional peace talks as cover to launch a surprise attack against Iran. the UAE would still likely be an OPEC member state had the US not unilaterally chosen to obliterate global energy markets for no consistent or clearly defined reason.

                                                                                                          And yet, UAE wants the US in the region and in UAE soil. Iran launched over 2500 missiles at the UAE, including civilian targets. Not sure your comment here reflects reality.

                                                                                                          > This conflict was well defined as geopolitical suicide for nearly forty years; its what kept the peace.

                                                                                                          Things change. US is the #1 energy producing country in the world in terms of oil, gas, &c. We're less dependent on the Middle East, plus we've basically secured the Venezuelan oil supply. Seems to me that what was once geopolitical suicide is no longer the case. We're here today, and life in the US just goes on as normal.

                                                                                                          > All simulations and tabletop exercises predicted such an incursion would send global energy markets into panic, trade markets into recession, and produce no meaningful advancement of either regional security or regime change.

                                                                                                          TBD

                                                                                                          > Iran is backed by powerful allies and has shown numerous times it can meet each US escalation with yet more regional attacks.

                                                                                                          Yes, Iran, who is supplying Russia with drones and such for its war against Ukraine is an ally, as is China.

                                                                                                          > We have tried escalation and failed, burned through a decade of advanced missiles fighting cheap drones, and have no defined objective politically or militarily for this conflict.

                                                                                                          We have not burned through a decade of advanced missiles fighting cheap drones. We can build our own cheap drones and are working on scaling production, and just because you don't understand the political or military objective doesn't mean that there isn't one, however poorly or well-thought it may be.

                                                                                                          The US has very much escalated and sits now at the top of the escalation ladder. Iran has been trying to get the US to the negotiating table due to the blockade. Iran can launch its missiles as it likes to at civilian targets in the Gulf. We + allies will just get better at shooting them down. Who cares? If Iran wants to try to escalate we'll just escalate further, blow up more stuff, keep the oil from flowing if we decide. It doesn't really hurt us much.

                                                                                                      • watwut

                                                                                                        today at 3:57 PM

                                                                                                        > Iran "closes the Straight", well the US can't do anything.

                                                                                                        Well, Iran closed the Straight and the world is facing biggest oil crises since 90ties. US was in fact incapable to prevent it. Even if the Straight opened today, harm already happened and will continue to happen for months. And I dont think it will open today.

                                                                                                        The war did not had to start at all and is causing considerable harm already. Iran feeling pain does not mean surrounding states were protected - instead they were put into harms way.

                                                                                                        > Pricing oil in Yuan because, I guess, the US is somehow not protecting the UAE doesn't make sense because China won't be there to protect them either.

                                                                                                        At this point, China is more predictable and crucially, more likely to keep their word. Not exactly entirely predictable and not exactly truth teller, but the difference here is huge.

                                                                                                          • ericmay

                                                                                                            today at 4:07 PM

                                                                                                            > The war did not had to start at all and is causing considerable harm already. Iran feeling pain does not mean surrounding states were protected - instead they were put into harms way.

                                                                                                            They were always in harm's way. The war could have waited, and Iran could have doubled or tripled its missile stockpile and then they really would have been in harm's way. You're falling in to the same trap I mentioned "country does X, end of analysis".

                                                                                                            > Well, Iran closed the Straight and the world is facing biggest oil crises since 90ties. US was in fact incapable to prevent it.

                                                                                                            Any country is incapable of preventing it then. Iran could always just mine the straight and threaten to launch missiles and go hide in the mountains. If Iran wasn't doing all of these awful things in the region, none of this would be happening.

                                                                                                        • asah

                                                                                                          today at 3:42 PM

                                                                                                          "only the paranoid survive"

                                                                                                            • ericmay

                                                                                                              today at 3:57 PM

                                                                                                              Yea there is some truth to that. The US is still in a wartime economy and cultural mode of thinking post-WWII (military budget, highway and infrastructure build, cultural characteristics around guns [1] and such). The downside is the degradation of quality of life, rage-bait, stress, those sorts of things. But if we have Americans constantly freaking out (and to some extent they should - being #1 is tough) about Chyna that does put pressure on the government to take these concerns seriously if they previously were not.

                                                                                                              [1] Not a 2nd Amendment criticism, I’m a strong supporter. More so the folks who load up on ammo and “cool” gear and all that stuff.

                                                                                                  • elictronic

                                                                                                    today at 3:01 PM

                                                                                                    Im not concerned with them selling with the yuan as China regularly screws around with its currency. The bigger issue is and other currencies which reduces the US impact.

                                                                                                    On the backside I’m sure there will be lots of fun back door deals around all those interceptors and future anti drone technologies. Today though the US has been the impetus of a lot of the current issues.

                                                                                                    • MattDamonSpace

                                                                                                      today at 2:57 PM

                                                                                                      “Might” and either way breaking OPEC is good for the West, regardless of their intent

                                                                                                      defecting from the cartel, a tale as old as time

                                                                                                      • lotsofpulp

                                                                                                        today at 2:41 PM

                                                                                                        >UAE announced this week they might start selling oil in yuan

                                                                                                        I have read this headline dozens of times in the previous 30 years.

                                                                                                          • Havoc

                                                                                                            today at 2:43 PM

                                                                                                            I don’t think the gulf is in same as always mode right now

                                                                                                              • Pay08

                                                                                                                today at 4:41 PM

                                                                                                                They kind of are. Iran has been attacking everyone in the Middle East for decades, occasionally seizing or destroying ships in Hormuz, and funding internal dissent. Things are worse right now, but not that much worse, and the short-term pain might very well be worth it for the long-term reduction in Iran's capabilities.

                                                                                                            • Eisenstein

                                                                                                              today at 2:48 PM

                                                                                                              That doesn't mean the warnings were frivolous. There was ultimately a change in course which averted it. How sure are you that will be the case this time?

                                                                                                              • Cyph0n

                                                                                                                today at 2:51 PM

                                                                                                                Has the GCC been in an existential state of panic to the point where they’re seriously questioning their relationship with the US any time in the past 30 years?

                                                                                                                  • bluGill

                                                                                                                    today at 3:00 PM

                                                                                                                    Someone has at several different points. It isn't always the same someone, but someone.

                                                                                                                      • Cyph0n

                                                                                                                        today at 3:04 PM

                                                                                                                        Which country?

                                                                                                                        Kuwait was “saved” by the US. The Iraq invasion was approved by the GCC, partly as payback for Kuwait, and anyways Iraq is not part of the GCC. The Qatar blockade was self-inflicted (and extremely stupid).

                                                                                                        • Pay08

                                                                                                          today at 4:16 PM

                                                                                                          Is "polic" a word?

                                                                                                          • thaumasiotes

                                                                                                            today at 2:29 PM

                                                                                                            Russia-led? Russia isn't even part of OPEC.

                                                                                                              • MobiusHorizons

                                                                                                                today at 2:40 PM

                                                                                                                I believe they are in opec+

                                                                                                                  • willchis

                                                                                                                    today at 2:48 PM

                                                                                                                    That's the ad-free version, it's an extra $12.99 a month.

                                                                                                        • austin-cheney

                                                                                                          today at 2:31 PM

                                                                                                          UAE is responsible for 12-13% of OPEC output as its third most productive member.

                                                                                                          In 2019 Qatar left OPEC, but nobody cared because oil is less than 10% of their national fossil fuel output, which was about 2% of OPEC's oil output.

                                                                                                          • sciencesama

                                                                                                            today at 4:40 PM

                                                                                                            is there a vested interest for usa and our war partner ?

                                                                                                            • Ifkaluva

                                                                                                              today at 3:10 PM

                                                                                                              Can somebody knowledgeable help me understand why this is in the interests of the UAE? Also, seems like a moot point since the strait is closed. Why do they think it’s in their best interests, and why now?

                                                                                                                • dannyw

                                                                                                                  today at 4:04 PM

                                                                                                                  They don’t have production limits anymore, and can produce and sell as much oil as they have capacity for.

                                                                                                                    • Ifkaluva

                                                                                                                      today at 4:06 PM

                                                                                                                      [dead]

                                                                                                                  • rramadass

                                                                                                                    today at 4:15 PM

                                                                                                                    1) The UAE has its "Abu Dhabi Crude Oil Pipeline" (see https://en.wikipedia.org/wiki/Habshan%E2%80%93Fujairah_oil_p...) to Fujairah export terminal on the "Gulf of Oman" bypassing the choke-point of "Strait of Hormuz" entirely. Given the current blockade of the strait and its uncertain future, Fujairah is now central to crude oil shipments for the World Market.

                                                                                                                    2) Thus far, the UAE has been prevented from maximizing its revenues due to OPEC/OPEC+ production caps which is no longer acceptable due to global needs. It can now chart its own independent course by ramping up production and earn hard currency which can be its leverage against an uncertain future.

                                                                                                                    3) Discontent with OPEC/OPEC+ and its members since the current conflict has made it clear that nobody will come to its aid when the chips are down (other than the US). It is "every man for himself" now and thus UAE has decided to chart its own independent path.

                                                                                                                    This is very welcome news and i hope other OPEC/OPEC+ members will also follow suit in their own national interests.

                                                                                                                      • don_esteban

                                                                                                                        today at 4:37 PM

                                                                                                                        1) The pipeline to Fujairah has capacity of 1.5m barrels per day, i.e. less than hald of UAE's current oil production. They still need Hormuz badly.

                                                                                                                        2) They can gain by increasing their production, IF they can get that out through Hozmuz. And IF (after Hormuz is opened) other OPEC+ countries DO NOT decide to do the same and the price of oil collapses.

                                                                                                                        3) US did not meaningfully came to their help. The high-end air defense systems were reserved/moved to Isreal. They mostly defended themselves, with the stuff they bought over the years from the US. A slightly cynical take would be 'classic protection racket'.

                                                                                                                        4) The national interests of other OPEC members are best served by being united against greater forces from outside region, not by fracturing and bickering among themselves. This is classical divide and conquer.

                                                                                                                • contingencies

                                                                                                                  today at 4:40 PM

                                                                                                                  What's a good investment vehicle for broader energy transition?

                                                                                                                  • asah

                                                                                                                    today at 3:44 PM

                                                                                                                    Counterintuitively, I see modern OPEC as mostly net-positive for the West because business and government most cherish stability which OPEC helps provides (emphasis on helps).

                                                                                                                    • sdkks

                                                                                                                      today at 4:11 PM

                                                                                                                      Well, looks like that was the price for getting the USD swap line. Milkshake theory won't last long, just like the petro dollar.

                                                                                                                      • today at 3:03 PM

                                                                                                                        • bhouston

                                                                                                                          today at 3:18 PM

                                                                                                                          The US is bailing out the UAE for liquify issues and this is likely a quid pro quo in return??

                                                                                                                            • Tangurena2

                                                                                                                              today at 4:29 PM

                                                                                                                              Well, it looks like the return on investment for that 747 bribe is pretty bad.

                                                                                                                          • ChrisArchitect

                                                                                                                            today at 2:18 PM

                                                                                                                            Some more discussion: https://news.ycombinator.com/item?id=47933983

                                                                                                                            • nashashmi

                                                                                                                              today at 2:55 PM

                                                                                                                              Iran lets oil traded in Yuan to navigate the Strait. OPEC sets prices in Petrodollars. What is the point of staying in OPEC then? Qatar is not part of OPEC so they were able to trade freely in Yuan.

                                                                                                                              • dueltmp_yufsy

                                                                                                                                today at 2:17 PM

                                                                                                                                Ok I was initially thinking this would be good for oil prices since they are leaving a cartel, but the article is saying this will just create more uncertainty. Seems we are damned if we do, damned if we don't these days.

                                                                                                                                  • thaumasiotes

                                                                                                                                    today at 2:25 PM

                                                                                                                                    > Ok I was initially thinking this would be good for oil prices since they are leaving a cartel, but the article is saying this will just create more uncertainty.

                                                                                                                                    Where does the article say that? It says this is expected to lower the price of oil.

                                                                                                                                    It also says that, because the price of oil is currently unstable, the impact will be difficult to see:

                                                                                                                                    > Mazrouei said the move, in which the UAE will also leave the OPEC+ grouping, would not have a huge impact on the market because of the situation in the strait.

                                                                                                                                    But it doesn't say anywhere that there's uncertainty over in which direction this moves the price of oil. The uncertainty is over what the price of oil will be.

                                                                                                                                    • tamimio

                                                                                                                                      today at 2:51 PM

                                                                                                                                      Since covid, either way and whatever the event is, it will always be used to increase the prices on consumer’s goods: war, tweets, a giraffe died in Nairobi, it doesn’t matter, prices will go up and never down! It won’t stop unless people, the normal average people, go out in streets rioting against that.

                                                                                                                                  • cogman10

                                                                                                                                    today at 2:21 PM

                                                                                                                                    > The UAE's exit from OPEC represents a win for U.S. President Donald Trump, who in a 2018 address to the U.N. General Assembly accused the organisation of "ripping off the rest of the world" by inflating oil prices.

                                                                                                                                    I can't see how it is actually a win for Trump. OPEC has mostly been a big partner with the US. They are the ones that have mandated using the dollar as the baseline currency for buying and selling OPEC oil.

                                                                                                                                    The UAE's exit almost certainly signals they are planning on selling oil in other currencies (probably the Chinese yuan). It's also a sign of the UAE wanting out of the partnership it's enjoyed with the US and it's allies.

                                                                                                                                      • letmevoteplease

                                                                                                                                        today at 2:27 PM

                                                                                                                                        OPEC has no rules requiring its members to sell oil in US dollars. Iran and Venezuela are members of OPEC.

                                                                                                                                        • rayiner

                                                                                                                                          today at 3:08 PM

                                                                                                                                          > OPEC has mostly been a big partner with the US. They are the ones that have mandated using the dollar as the baseline currency for buying and selling OPEC oil.

                                                                                                                                          Has anyone ever quantified the benefit the U.S. supposedly gets from dollar denominated oil? How does that compare to the cost to the U.S. of paying cartel pricing for oil? Given that the U.S. is a huge oil consumer, surely the cost to it of cartel pricing in oil is huge.

                                                                                                                                          • bilbo0s

                                                                                                                                            today at 2:30 PM

                                                                                                                                            In fairness to the UAE, of all the nations of the world, they're the ones who have lost the most economically speaking in the current unpleasantness.

                                                                                                                                            It's kind of unfair.

                                                                                                                                            If they can recoup some of those losses selling outside the system in Chinese currency, (or even in US currency), I have to imagine that would provide some ameliorative relief. It won't make them whole. They've got a lot of problems right now. But I mean, at least it starts them filling back in the giant hole that everyone else dug for them.

                                                                                                                                              • don_esteban

                                                                                                                                                today at 4:42 PM

                                                                                                                                                Of all the nations of the world, the one that has lost the most (at least in the short term) is clearly Iran.

                                                                                                                                                On the other hand, from the longer term point of view, it looks like big part of the business model of UAE/Dubai (a safe, luxury place for rich) has been shattered and I don't see it coming back.

                                                                                                                                                In the short term, they might want extra revenue, but in the long term, creating extra tensions with their neighbour can't be good.

                                                                                                                                            • M3L0NM4N

                                                                                                                                              today at 3:07 PM

                                                                                                                                              It will probably increase total global oil production, which is good for the US consumer (what Trump seems to care about more), but not US producers.

                                                                                                                                              • techblueberry

                                                                                                                                                today at 3:16 PM

                                                                                                                                                > I can't see how it is actually a win for Trump. OPEC has mostly been a big partner with the US.

                                                                                                                                                I mean, I don’t even know if I mean this sarcastically anymore, but are we sure that Trump and the US’ interests are aligned? I think something can be a win for Trump and a loss for the USA.

                                                                                                                                                  • parthdesai

                                                                                                                                                    today at 4:14 PM

                                                                                                                                                    Majority of US voted for Trump. Maybe not aligned with your version of US, but this is what the majority wanted

                                                                                                                                                      • Tangurena2

                                                                                                                                                        today at 4:31 PM

                                                                                                                                                        Only about 1/3 of registered voters actually voted for him. About 1/3 of registered voters sat that election out.

                                                                                                                                                        • Ajakks

                                                                                                                                                          today at 4:23 PM

                                                                                                                                                          Nobody wanted a war in Iran, recall how Trump wasnt going to start any new wars? We are in this conflict bc of Zionists - it had nothing to do with US interests at all.

                                                                                                                                                  • thaumasiotes

                                                                                                                                                    today at 2:27 PM

                                                                                                                                                    It's a win for Trump in the pretty straightforward sense that it's something he publicly announced he wanted.

                                                                                                                                                    Whether he finds the overall effects positive or negative is a different question.