Transcription
The United Arab Emirates says that it is withdrawing from OPEC and OPEC+. OPEC is a decades-old cartel of the world's largest oil-producing exporters. The energy minister says that it will make it easier for the UAE to meet changing demand, but it is a major blow to OPEC at a time when the Iran war has triggered a global energy crisis. And as the price of oil hits three-week highs.
CNN's Leonie Jogos joins me now from Dubai. Leonie. And so with the UAE doing this and making this announcement today, I believe they are the third or fourth largest producer among OPEC members. Talk about the significance here and the impact that it's already having within the region.
Yeah, it's it's the third largest producer within OPEC. And it's really significant. I mean, frankly, it's a bombshell announcement today, Bianna. You know, they joined in 1967, one of the founding members. And that was just a few years before the formation of the UAE. And this is, you know, really going to shape what we see in the oil market. And you were talking about WTI, you know, responding quite aggressively on the back of this news. And we've seen an increase in oil prices as we hear one of the oldest members withdrawing from this organization. This is importantly, and organizations can exert influence on oil prices. It has the ability to control supply. So when oil prices go high, then, you know, we start to see quotas from these oil-producing nations, nations. And that starts to temper oil prices. But when oil prices are low, there is also when they step in specifically to protect oil producers, that if oil prices are below what it costs to produce a barrel of oil, they can also play around with that. That's why they're viewed as a cartel.
The UAE energy minister says this is not a political decision, but many people are focusing on the timing, given that we are currently in the largest energy crisis in the history of markets. Take a listen to what he said.
"This is not a political decision. This is a pure policy, position, and repositioning us to be, it is in front of, of the world taking the right decision at the speed that we aspire for. To us, it's the consumers are critical to us. We need to attend to these countries who entrusted us to build the refineries based on our crude and our crude today. And bond is one of the cleanest, if not the cleanest crude. On Earth."
So really important to note here that in the statements that was released today by media, they say that when they joined the alliance, they have made significant contributions as well as even greater sacrifice, as they say, for the benefit of all. And that's because they've been adhering to a quota system. As of April 2025, UAE was allowed to sell 3.5 million barrels of oil per day when the capacity is around 5 million barrels of oil per day. And given that we've seen not only attacks by Iran on critical energy infrastructure targeted here on the UAE, as well as other Gulf states, but also the closure of the Strait of Hormuz has completely changed the way the UAE views its position and the global energy markets. And they say they're going to start focusing on national interests and continue their commitment to stabilizing oil prices. But, Bianna, any way you look at this, many people are questioning the fate of OPEC right now, whether this is a precursor to more countries leaving OPEC. And importantly, what happens to oil prices from here and the future relationship. Once again, a question between the Saudis and the Emiratis as well.
Only gioco. Thank you so much.
Gas prices are surging to the highest level in nearly four years because, of course, of deadlocked Iran war. And the talks are just aren't going anywhere and are rattling the global economy. Now, the national average is now $4.18 a gallon. That's up nearly $0.07 from just yesterday, and the highest price since the war began. And just to get kind of a better sense or a window into what we're watching right now, it's important to look back over time when to draw a little bit on the magic wall and try not to make a fool of myself. As Richard is watching me here, we said, for 18 is where things stand today. And I think when you look at the run-up just since the start of the war, what's so notable is the speed and scale of the surge of the prices, but also that prices were below $3 a gallon right before this was all happening at the end of last year, at the start of January. Everything the Trump administration wanted on this front, Richard, was happening. And if you look back over to the Ukraine conflict and kind of the aftermath of that in the near term, and you saw gas prices topping $5 came back down pretty, pretty cents. Richard, we haven't hit the $5 mark yet. This seems dramatically worse from a global market perspective in terms of the disruption we're living through. Where do you see this going?
All right, so let's, I wish I'd known you had your toys out because I got one that I could have used instead and said, I'm just going to go the old-fashioned way. You can't really see this very clearly. But essentially, essentially, the oil price has risen quite sharply. Right. So we have a very sharp rise in the oil price, as you can see. Now, the important point to realize is this split once the oil price got up there, over $100 a barrel, it's going to be shaded in. So you can see it doesn't matter how long it continues. This bit is baking in slow growth, slowing economy, higher inflation. And as this continues on and on and on, you know, the president can say this will be over in a few weeks. Anybody can say they'll be talks in Islamabad. But as long as this big watch continues, for one, that's the that's doing the damage. Anything over up towards $100 a barrel. So you ask how long this goes on. It goes on until there's a reason for the price to come down. And during the markets does it once or twice, but longer term, well, it's not going to do it. And that's why you're seeing what you're seeing on yours.
Yeah. And it seems like markets, we've talked about this before, are finally looking around saying, oh wait, there's no like near-term solution here anywhere at all. And the longer this goes up. But but the cake is baking all along. That's the crucial part about it. Every moment that oil is at these elevated levels, it the is all slowing. Inflation's getting worse and it is a continuing deteriorating situation. Yeah. And dislocations. It will take months to fix only grow more significant. Okay. I actually I want to ask you because you and I could talk about the next question probably for the next four or five hours. The UAE announces withdrawing from the Organization of Petroleum Exporting Countries. I was stunned. You probably knew this was coming and have all sorts of reasons as to why it happened, but this is a significant thing from a global market perspective.
The reason is because the UAE, forgive the vernacular, the UAE has been pissed off with the allocation, its quota that it gets from OPEC. It wants 3.8 million barrels. It's had 3.2. They were given 3.5. And they believe, oh, at the UAE, that's Abu Dhabi, it's Dubai, it's Sharjah, had all of those. The seven emirates, they believe they've spent a fortune on their oil infrastructure. They should be allowed to recoup it. Their oil is cheap to produce and therefore they need to crank it out. Now, why is this? It's a there's a paradox here because the more they want to get for themselves, the more they produce. Therefore, the price will come down. This is about mine is bigger than yours. This is about saying I'm not getting my fair share. And they believe if they take this measure, eventually Saudi will cave or something like that will happen. It'll be fascinating to watch. But there are there are things are moving right now in terms of the U.S. By the way. By the way, the US, which is one of the largest manufacturer of producers of energy in the world, the US is rapidly turning into the swing producer. That can affect in many cases. Yep, Atlantic Basin. Look it up. There are fascinating things happening right now. Richard Quest, always appreciate you, my friend. Thanks so much.