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Writing is on the wall for oil as UAE exits Opec

Otago Daily Times Online News·Monday, 4 May 2026·29 days ago
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Eat your hearts out, Pablo Escobar, Joaquin "El Chapo" Guzman and Nemesio "El Mencho" Oseguera Cervantes. The richest cartel by far is still the Organisation of Petroleum Exporting Countries (Opec), and its leaders also get to die in bed. But one of its oldest members, the United Arab Emirates (UAE), has just quit. No notice, no explanations — just quit. The UAE is the cartel’s third-biggest producer, so this is going to have several major consequences. The first, which will happen as soon as the Strait of Hormuz is reopened, is that the price of oil will drop, possibly even below the pre-war price. Brent oil was selling for about $US65 ($NZ110) a barrel one year ago; this week it reached $US119. The whole purpose of a cartel is to keep the price of the product high by restricting the supply. That requires discipline by the producers, because some producers will benefit more than others if they succeed in keeping the prices high.…

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