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UAE exits OPEC Gas prices spike to highest in 4 years · INSIGHT TODAY

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  Speaker 1: The United Arab Emirates says that it is withdrawing from
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  Speaker 1: OPEC and OPEK plus OPEK is the decade's old cartel
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  Speaker 1: of the world's largest oil producing exporters. The Energy Minister
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  Speaker 1: says that it will make it easier for the UAE
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  Speaker 1: to meet changing demand, but it is a major blow
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  Speaker 1: to OPEK at a time when the Iran war has
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  Speaker 1: triggered a global energy crisis, and as the price of
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  Speaker 1: oil it's three week highs CNN's Eleni Giocos joins me
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  Speaker 1: now from Dubai. Eleni and so with the UAE doing
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  Speaker 1: this and making this announcement today, I believe they are
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  Speaker 1: the third or fourth largest producer among OPEK members. Talk
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  Speaker 1: about the significance here and the impact that it's already
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  Speaker 1: having within the region.
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  Speaker 2: Yeah, so it's the third largest producer within OPEK and
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  Speaker 2: it's really significant. I mean, frankly, it's a bombshell announcement today. Bianna.
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  Speaker 2: You know, they joined in nineteen sixty seven, one of
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  Speaker 2: the founding members, and that was just a few years
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  Speaker 2: before the formation of the UAE, and this is, you know,
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  Speaker 2: really going to shape what we see in the oil markets.
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  Speaker 2: And you were talking about WTI, you know, responding quite
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  Speaker 2: aggressively on the back of this news, and we've seen
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  Speaker 2: an increase in oil prices as we hear one of
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  Speaker 2: the oldest members withdrawing from this organization. This is importantly
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  Speaker 2: an organization can exert influence on oil prices. It has
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  Speaker 2: the ability to control supply. So when oil prices go high,
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  Speaker 2: then you know, we start to see quotas from these
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  Speaker 2: oil producing nations and that starts to temper off oil prices.
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  Speaker 2: But when oil prices are low, that is also when
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  Speaker 2: they step in specifically to protect oil producers. That if
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  Speaker 2: oil prices are below what it costs to produce a
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  Speaker 2: barrel of oil, they can also play around with that.
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  Speaker 2: That's why they're viewed as a cartel. The UAE Energy
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  Speaker 2: Minister says, this is not a political decision, but many
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  Speaker 2: people are focusing on the timing given that we are
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  Speaker 2: currently in the largest energy crisis in the history of markets.
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  Speaker 2: Take a listen to what he said.
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  Speaker 3: This is not a political decision. This is a pure
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  Speaker 3: policy position and repositioning us to be it is in
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  Speaker 3: the front of the world taking the right decision at
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  Speaker 3: the speed that we aspire for. To us, it's the
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  Speaker 3: consumers are critical to us. We need to attend to
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  Speaker 3: these countries who entrusted us to build the refineries based
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  Speaker 3: on our crude and our recruit today in Morbanne is
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  Speaker 3: one of the cleanest, if not the cleanest crude on earth.
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  Speaker 2: So really important to note here that in the statements
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  Speaker 2: that was released today by media, they say that when
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  Speaker 2: they joined the alliance, they have made significant contributions as
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  Speaker 2: well as even greater sacrifices, they say, for the benefit
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  Speaker 2: of all, and that's because they've been adhering to a
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  Speaker 2: quota system. As of April twenty twenty five, UAE was
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  Speaker 2: allowed to sell three point five million barrels of oil
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  Speaker 2: per day when their capacity is around five million barrels
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  Speaker 2: of oil per day. And given that we've seen not
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  Speaker 2: only a tax by a run on critical energy infrastructure
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  Speaker 2: targeted here on the UAE as well as other Gulf states,
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  Speaker 2: but also the closure of the Strait of Homos has
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  Speaker 2: completely changed the way the UAE vieus its position in
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  Speaker 2: the global energy markets. And they're saying they're going to
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  Speaker 2: start focusing on national interests and continue their commitment to
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  Speaker 2: stabilizing oil prices. But Banna anyway, you look at this.
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  Speaker 2: Many people are questioning the fate of Opek right now,
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  Speaker 2: whether this is a precursor to more countries leaving Opek,
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  Speaker 2: and importantly what happens oil prices from.
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  Speaker 1: Here and the future relationship once again a question between
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  Speaker 1: the Saudis and the Imiordes as well and Giocos, thank
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  Speaker 1: you so much.
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  Speaker 4: Gas prices are surging to the highest level in nearly
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  Speaker 4: four years because of course of deadlocked Ran war and
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  Speaker 4: the talks that just aren't going anywhere and are rattling
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  Speaker 4: the global economy. Now the national average is now four
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  Speaker 4: dollars in eighteen cents a gallon. That's up nearly seven
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  Speaker 4: cents from just yesterday and the highest price since the
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  Speaker 4: war began. And just to get kind of a better
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  Speaker 4: sense or a window into what we're watching right now,
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  Speaker 4: it's important to look back over time. We're going to
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  Speaker 4: draw a little bit on the magic wall and try
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  Speaker 4: not to make a fool of myself as Richard is
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  Speaker 4: watching me here. We said four eighteen is where things
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  Speaker 4: stand today. And I think when you look at the
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  Speaker 4: run up just since the start of the war, what's
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  Speaker 4: so notable is the speed and scale of the surge
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  Speaker 4: of the prices, but also the prices were below three
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  Speaker 4: dollars a gallon right before this was all happening at
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  Speaker 4: the end of last year, the start of January. Every
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  Speaker 4: the Trump administration wanted on this front, Richard was happening.
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  Speaker 4: And if you look back over to the Ukraine conflict
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  Speaker 4: and kind of the aftermath of that in the near term,
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  Speaker 4: and you saw gas prices topping five dollars, came back
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  Speaker 4: down pretty sentily, said so, Richard, we haven't hit the
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  Speaker 4: five dollars mark yet. This seems dramatically worse from a
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  Speaker 4: global market perspective, in terms of the disruption we're living through.
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  Speaker 4: Where do you see this going?
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  Speaker 5: All right, so let's I wish i'd known you had
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  Speaker 5: your toys out, because I've got one that I could
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  Speaker 5: have used and said, I'm just gonna go the old
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  Speaker 5: fashioned way. You can't really see this way clearly, but essentially, essentially,
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  Speaker 5: the oil price has risen quite sharply, right, So we
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  Speaker 5: have a very sharp rise in the oil price, as
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  Speaker 5: you can see.
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  Speaker 1: Now.
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  Speaker 5: The important point to realize is this bit. Once the
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  Speaker 5: oil price got up there over one hundred dollars a barrel,
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  Speaker 5: it's gonna shade it in so you can see it
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  Speaker 5: doesn't matter how long it continues. This bit is baking
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  Speaker 5: in slow growth, slowing economy, higher inflation. And as this
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  Speaker 5: continues on and on and on, you know, the president
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  Speaker 5: can say this will be over in a few weeks,
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  Speaker 5: anybody can say they'll be talking in Islamabad. But as
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  Speaker 5: long as this big wad continues forward, that's the bit
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  Speaker 5: that's doing the damage. Anything over up towards one hundred
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  Speaker 5: dollars a barrel. So you ask how long this goes on?
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  Speaker 5: It goes on until there's a reason for the price
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  Speaker 5: to come down. And during the markets does it once
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  Speaker 5: or twice, But longer term, Phil, it's not going to
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  Speaker 5: do it. And that's why you're seeing what you're seeing
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  Speaker 5: on yours.
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  Speaker 4: Yeah, and it seems like markets we've talked about this before,
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  Speaker 4: are finally looking around saying, oh wait, there's no like
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  Speaker 4: near term solution here anywhere at all. And the longer
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  Speaker 4: this goes on, but.
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  Speaker 5: The cake is baking all along. That's the crucial part
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  Speaker 5: about it. Every moment that oil is at the elevated levels,
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  Speaker 5: the economies are slowing, inflations getting worse, and it is
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  Speaker 5: a continuing deteriorating situation.
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  Speaker 4: Yeah, in this location, they'll take months to fix, only
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  Speaker 4: grow more significant. Okay, Actually I want to ask you
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  Speaker 4: because you and I could talk about the next question,
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  Speaker 4: probably for the next four or five hours. The UAE
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  Speaker 4: announces withdrawing from the Organization of Petroleum Exporting Countries. I
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  Speaker 4: was stunned. You probably knew this was coming and have
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  Speaker 4: all sorts of reasons as to why it happened.
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  Speaker 5: But this is a.
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  Speaker 4: Significant thing from a global market perspective.
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  Speaker 5: The reason is because the UAE, forgive the vernacular, the
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  Speaker 5: UAE has been pissed off with the allocation. It's quota
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  Speaker 5: that it gets from Opek. It wants three point eight
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  Speaker 5: million barrels, it's had three point two. They were given
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  Speaker 5: three point five. And they believe the UAE that's Abu Dhabi,
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  Speaker 5: it's Dubai. It charged all of those the seven emirates.
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  Speaker 5: They believe they've spent a fortune on their oil infrastructure.
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  Speaker 5: They should be allowed to recoup it. Their oil is
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  Speaker 5: cheap to produce, and therefore they need to crank it out. Now,
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  Speaker 5: why is this It's a both. There's a paradox here
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  Speaker 5: because the more they want to get for themselves, the
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  Speaker 5: more they produce, therefore the price will come down. This
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  Speaker 5: is about mine is bigger than yours. This is about
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  Speaker 5: saying I'm not getting my fair share. And they believe
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  Speaker 5: if they take this measure, eventually Saudi will give or
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  Speaker 5: something like that will happen.
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  Speaker 4: It'll be fascinating to watch. There are there are things
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  Speaker 4: are moving right now in terms of.
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  Speaker 5: The US, by the way. By the way, the US,
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  Speaker 5: which is one of the largest manufacturer producers of energy
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  Speaker 5: in the world, the US is rapidly turning into the
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  Speaker 5: swing producer that can affect in many cases.
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  Speaker 4: Yep, Atlantic Basin.
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  Speaker 2: Look it up.
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  Speaker 4: There are fascinating things happening right now. Richard quest always
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  Speaker 4: appreciation for a friend. Thanks so much.