UAE’s exit from OPEC to eventually lead to lower oil prices — Chinese expert

SHANGHAI, April 29. /TASS/. The UAE’s withdrawal from OPEC and OPEC+ could lead to lower oil prices in the long term, Sun Degang, director of the Middle East Studies Center at Fudan University, told TASS. "In the short term, the UAE’s withdrawal from OPEC and OPEC+ will deal a devastating blow to the OPEC system and potentially lead to higher oil prices, but in the long run, the UAE may increase production and release additional capacity, which could contribute to lower oil prices," Degang stated. According to him, the UAE’s exit will have a major impact on oil exporters, including strengthening cooperation between the UAE and the US and weakening Saudi Arabia’s position in global energy pricing and negotiations. Sun cited factors including UAE’s dissatisfaction with Saudi-led quotas. "Saudi Arabia advocates for oil production cuts to raise prices, while the UAE, in turn, proposes that OPEC members increase production to compete with non-OPEC countries for a share of the global energy market," the expert explained. Another factor is the fact that the UAE suffered the greatest losses during the US and Israeli military operation against Iran, and other Arab OPEC members were unable to provide the necessary assistance. Degang noted that relations between Palestine and Saudi Arabia, as well as the UAE’s exclusion from the US-Iran peace talks in Pakistan, are also factors. "China will not interfere in the internal mechanisms of OPEC+," Degang said, noting that the UAE’s decision will have a minor impact on China as an energy importer. He recalled that China has long pursued a strategy of diversifying its energy imports, with the Persian Gulf region accounting for approximately 40% of China’s oil imports, key energy partners being Saudi Arabia, the UAE, Oman, Iraq, and Kuwait.