New Delhi: The UAE had been contemplating leaving the Organisation of Petroleum Exporting Countries (OPEC) cartel for the past five years due to dissatisfaction with oil production quotas set by the Saudi Arabia-dominated group, according to former Indian Ambassador Navdeep Singh Suri. The revelation highlights underlying tensions within the global oil alliance.
In an exclusive interview with IANS, Suri said: “There were indications as early as July 2021 that they were not happy with the quota that was allocated to them, about 2.7 million barrels per day. And they had said that if the quota is not raised, they might consider leaving.”
“Eventually, the quota was raised to 3.4 million. But now, the UAE has invested quite a lot over the last few years in its production capacity. I think by next year, they will hit the ability to produce about 5 million barrels a day. And obviously, they want to be able to do that without being under the tight restrictions imposed by Saudi Arabia and by the other OPEC members,” he contended.
Asked what impact the UAE’s exit from the OPEC cartel would have on global oil markets, Suri replied: “Right now, of course, Strait of Hormuz is blocked, and we are all living in an energy scarcity scenario. And today, oil prices have crossed $125 per barrel. So, whatever I’m saying in terms of looking forward is predicated on the reopening of the Strait of Hormuz and normal flows of oil and gas being restored.”
“Once that happens, I think the additional output from countries like the UAE should help in moderating the oil prices, and that is something that will benefit India. But also, I think the second consequence could be that OPEC, to an extent, over the years has managed to balance demand and supply of oil and tried at least to some extent to control volatility in oil prices. I think a weaker OPEC and more countries operating on their own might increase volatility in oil prices. That’s something that we might see going forward,” he observed.
Asked to comment on the Iran-US war from India’s standpoint, the former Ambassador said: “We are obviously very concerned about the developments. We are seeing that they have a direct impact on the Indian economy.”
“Iran’s attack on its neighbours as a retaliatory step was illegal. Iran’s blockage of the Strait of Hormuz is illegal, and the US blockage is illegal too,” he remarked.
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–IANS
