U.S. President Donald Trump has welcomed the United Arab Emirates' historic decision to exit the Organization of the Petroleum Exporting Countries (OPEC).
He praised UAE President Sheikh Mohammed bin Zayed Al Nahyan, calling him a visionary leader. Trump believes that this move will increase competition in oil production, leading to a decrease in crude oil and gas prices in the global market. He stated that the UAE's decision could prove beneficial for American consumers and the global economy, as exiting OPEC would allow the UAE to increase production at its discretion.
The UAE's decision to leave OPEC has surprised energy experts worldwide. According to a report by ASK Wealth Advisors, while the immediate impact on prices is uncertain, it may weaken coordination regarding future oil supply. The report warned that amid ongoing tensions in the Strait of Hormuz, this step by the UAE could make the trading range more volatile.
A lack of coordination within OPEC Plus could reduce the 'cartel premium,' leading to significant price fluctuations. On the other hand, renowned economist Jeffrey Sachs expressed deep concern regarding this change. He warned that the UAE's exit could prove to be a 'strategic mistake' amid rising geopolitical tensions and crude oil prices surpassing $100 per barrel.
According to Sachs, ongoing disruptions in oil and gas supply could push the global economy towards a severe crisis and widespread instability. He emphasized that coordinated supply management is crucial during this global shift from fossil fuels to renewable energy.
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