In 2023, the United Arab Emirates will be quite active. The Gulf nation aims to increase OPEC its oil production, maintain its position as the major hub for Western investment in the area, and make a great impression when Dubai hosts the COP28 climate summit in November. President Mohammed bin Zayed al-Nahyan, also known as MbZ, would then decide to reconsider one of his nation’s longest partnerships.
In the 62 years that the Organization of the Petroleum Exporting Countries has existed, the UAE has played a significant role as a member of the group. However, the present OPEC strategy is not in MbZ’s favour. Compared to its 4-million-barrel capacity, the state is only permitted to pump 3 million barrels per day.
It falls even farther short of a daily output goal of 5 million barrels that the Abu Dhabi National Oil Company recently moved from 2030 to 2027.
UAE had already complained about OPEC limitations in 2020 and 2021. However, Saudi Crown Prince Mohammed bin Salman, the oil cartel’s de facto chairman, has recently led it in a particularly unstable path. The present cuts by OPEC are ostensibly intended to counteract the likelihood of a drop in oil prices as the United States and Europe experience a recession. However, they also provide MbS a chance to poke US President Joe Biden, who wants producers to pump more. As part of the larger OPEC+ group, OPEC’s partnership with Russia runs the risk of including its members in a larger anti-Western coalition.
By leaving, MbZ might do the same as Qatar did in 2019. The UAE would then reap the financial rewards of being allowed to pump whatever it pleased while also gaining favour with the United States and its allies. That would aid in preventing Saudi aspirations to unseat Abu Dhabi and Dubai as the key Gulf locations for Western capital and business headquarters.
Officially, OPEC anticipates that the demand for petroleum will increase through 2035. However, it may be argued that ADNOC’s expedited oil output plan is more consistent with a different vision, one that the International Energy Agency prefers, in which oil consumption peaks considerably sooner. If MbZ were to emphasise it during the COP28 meeting,
It may distance the UAE from OPEC even more.
All of this may be accurate even if the two don’t actually split up in 2023. It would also be uncomfortable to leave OPEC to increase oil production while holding a climate summit. But it might not bother MbZ, who might use COP28 to support innovations that lessen the harm caused by oil pollution while also laying out a more plausible long-term path away from fossil fuels. Distancing the UAE from the club of oil producers would send a very strong message.