Tag Archives: The Organization of the Petroleum Exporting Countries (OPEC)

The World Is Rapidly Changing

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It will be a while before we truly realize the aftershocks of what is happening in Iran. It may be a while before we know what is actually happening in Iran, but the impact of what has happened so far will be felt for a long time. I believe the war in Iran began with the Hamas attack on Israel in 2023. That attack ended the idea of a peaceful Palestinian state, which Gaza was established to be. Once that illusion was shattered, and Israel realized how vulnerable it was, the war with Iran was inevitable whether or not America approved or got involved. The issue became the survival of Israel. Since the war began, other Arab states have realized that they are not immune from the terrorist activities of Iran. The region in gradually reshaping itself into a more modern, economically bonded region.

On Tuesday, The Hill reported:

The United Arab Emirates (UAE) will leave the Organization of the Petroleum Exporting Countries (OPEC), the country’s government said on Tuesday. 

The country will officially exit OPEC and its broader OPEC+ association on May 1 following the government’s internal review of its production policy, according to UAE state media, WAM. 

“This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets,” WAM reported.

The move marks a major change for the permanent intergovernmental organization, which sets uniform petroleum policies among its member countries with the mission of maintaining stable global oil markets.

The UAE first joined OPEC seven years after its founding in 1960 under the emirate of Abu Dhabi, and it has been a vital member of the intergovernmental organization. The country’s exit follows UAE officials’ complaints about OPEC’s quotas and the country’s reported clashes with the organization’s de-facto leader, Saudi Arabia.

This decision is also the result of the fact that America is not only energy independent–we are exporting oil. Saudi Arabia no longer has the sway that it once had. The energy market is now every man for himself. It will be interesting to see what impact this has on crude oil prices.

The Organization of the Petroleum Exporting Countries (OPEC) Will Leave Output Levels Unchanged

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On Sunday, Zero Hedge posted an article about The Organization of the Petroleum Exporting Countries (OPEC)’s plans to leave production levels unchanged through the first quarter of 2026.

The article reports:

OPEC+ agreed to pause production hikes and leave oil output levels unchanged for the first quarter of 2026 at its meetings on Sunday as the group slows down its push to regain market share amid fears of a looming supply glut.

Eight OPEC+ members have paused oil output hikes for the first quarter of 2026 after releasing some 2.9 million barrels per day into the market since April 2025, and Sunday’s meeting reaffirmed that decision, OPEC said in a statement.

OPEC+ still has about 3.24 million bpd of output cuts in place, representing around 3% of global demand. The Sunday meetings did not alter those. These comprise a 2 million bpd oil output cut by most members which is in place until the end of 2026, and the remaining 1.24 million bpd of a 1.65 million bpd reduction that the eight members started to return to the market in October.

Oil is a worldwide commodity. America’s increased oil and natural gas production have impacted the energy market. OPEC can no longer dramatically impact the American economy by increasing or decreasing its oil output. Many of us who remember the oil embargo of the 1970’s appreciate President Trump’s move toward American energy independence. As OPEC resumes production increases, Americans will probably see their energy costs decrease slightly–OPEC currently represents only 3% of global demand.

The article concludes:

Among the OPEC+ members, Russia, Iran and Venezuela are under Western sanctions.

“The message from the group was clear: stability outweighs ambition at a time when the market outlook is deteriorating rapidly,” said Jorge Leon, a former OPEC official who now works as head of geopolitical analysis at Rystad Energy.

The meeting of OPEC+ came during a fresh U.S. effort to broker a peace deal between Russia and Ukraine, which could add to oil supply if sanctions on Russia are eased. If the peace deal fails, Russia could see its supply curbed further by sanctions. Alternatively, a peace deal could unleash millions of “clean” barrels on markets that have been locked out since 2022.

OPEC+ has been discussing the production capacity and quotas issue for years and it has proved difficult because some members such as the United Arab Emirates have increased capacity and want higher quotas.

Other members such as African countries have seen declines in production capacity but are resisting quota cuts. Angola quit the group in 2024 over a disagreement about its production quotas.

Brent crude closed on Friday near $63 a barrel, down 15% this year; it has been in a mostly straight decline since the 2nd quarter of 2024.

As America increases its energy production, the impact of OPEC’s decisions will lessen.