“We want a bigger market share, to monetize as much as we can from our reserves, especially when we have spent billions developing them.”
That is the not so subtle quote WSJ reports from a senior UAE oil executive, confirming the widening split between the Saudis (OPEC) and its long-time ally.
Simply put, UAE’s strategy is – sell as much crude as possible before demand dries up – and raises growing concerns that the cartel is at risk.
WSJ reports that while the country isn’t worried about a sudden drop in demand, people familiar with the new tack say the country wants to pump and sell as much as it can now, when demand and prices are strong. Proceeds will help it wean its economy off oil.
“This is the time to maximize the value of the country’s hydrocarbon resources, while they have value,” said a person briefed on the U.A.E.’s strategy.
“The aim of the investment is to generate revenue for the diversification of the economy, both for investment in new energy and, as importantly, in new revenue streams.”
The market reaction was to erase the bounce back in crude prices and return WTI to yesterday’s post-OPEC+ ‘no deal’ lows…
Of course, broken cartel or not, it’s clear that this could all be one big negotiating tactic…
? FWIW, need to remember that this ‘f*ck it, we are opening the taps’ noise from the UAE has as much chance of being a negotiating tactic as anything else.
— PiQ (@PriapusIQ) July 7, 2021
In the meantime, the Biden admin is anxiously watching gas prices in the US.. but for now has not publicly denigrated OPEC+’s actions (or lack thereof).