Comment by dgrin91
1 day ago
My guess is that is this because UAE has ports on the other side of Hormuz and doesn't want to be restricted in their usage by OPEC? Does this mean UAE thinks Hormuz will be a problem for a long time? And what does it mean for oil prices long term?
> My guess is that is this because UAE has ports on the other side of Hormuz and doesn't want to be restricted in their usage by OPEC?
Does OPEC limit that? It would be very surprising to me if they did, as the point of opec is only to limit production when oil prices are low. They aren't low right now.
Besides, nobody actually follows the OPEC limitations.
It means the UAE is pissed Iran attacked it then tried to block all passage through UAE controlled waters.
The UAE has the ADCOP (Abu Dhabi Cross Oil Pipeline) to move oil to beyond the Strait. It has a capacity of ~1.8Mbpd (million barrels per day) so is only a fraction of the UAE's total oil exports and a tiny fraction of the oil exports impacted by the Strait being closed. It's also being used already. I don't know how these particular oil exports have been impacted. They are beyond the Strait but not by that much. Iran is still entirely capable of harassing shipping there.
I believe the US has given tacit approval or is behind this move entirely for what comes when the Strait inevitably reopens and that is to get the UAE to export well beyond what they might otherwise as an OPEC member.
The UAE like most GCC countries is entirely dependent on US arms to maintain their regime so I simply cannot imagine them doing this without the US putting them up to it or looking the other way.
> ~1.8Mbpd (million barrels per day)
Mbpd = thousand barrels per day, MMbpd = million barrels per day
> so is only a fraction of the UAE's total oil exports
Isn’t it 30-50%ish depending on how you count it? Calling it “a fraction” makes it sound much smaller in conventional English.
They might be leaving either for a) price independence or b) currency flexibility.
OPEC doesn’t enforce currency or monetary policy rules.
Do they? I just looked at a map and I see very little oil infrastructure on that side of Hormuz plus isn't Oman Iran aligned?
No expert but I always got the impression Oman was a neutral party. They help run the Hormuz with Iran but largely neutral in world politics.
It also looks fairly easy to mine/blockade outside of their territorial waters. You don’t need that many drones to make the whole area unusable for marine transport. The strait is the clearest choke point but I don’t know how much bypassing it would help UAE
You don't even need to hit that many ships either.
Despite there being way less than 1 successful attack per week [1] travel through the Red Sea is down from ~500/week to ~200/week [2].
[1]: https://en.wikipedia.org/wiki/Houthi_attacks_on_commercial_v...
[2]: https://en.wikipedia.org/wiki/Red_Sea_crisis#Houthi_attacks_...
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Fujairah, on the other side of Hormuz is the fourth largest bunkering hub in the world. That’s not “little oil infrastructure”
They do, it's only like 1-2 million barrels a day in capacity right now.
Oman is the Switzerland of the Middle East.
As democratic popular opinion turns against classical liberal economic principles, many theocratic or monarchist hell holes are increasingly becoming the unexpected underdog turned winners in economic freedom. It's been fascinating to watch.
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You should visit Fujairah ! Huge facilities there.
https://en.wikipedia.org/wiki/Habshan%E2%80%93Fujairah_oil_p...
That would also explain why UAE is oddly in favor of a war in their region.
Oman benefits significantly more from the war in Iran than the UAE, but is the most favorable country towards Iran in the GCC. See the visual here: https://archive.is/Xt3gd
Saudi Arabia and the UAE have been urging the US to bomb Iran since 2015 for their own non-oil reasons. They see political Islamism as a strategic and domestic threat. That's why they had Qatar under a blockade for a number of years. Iran is their biggest rival, exporting militancy to Yemen - the Houthis who UAE and Saudi Arabia battled for a number of years last decade. A number of attacks on Saudi and UAE oil and gas facilities from Iran Quds-backed militant groups in Iraq across 2019-2022. None of this makes the news in the West.
UAE's major issue with Saudis is their quiet support for Islamism as well. They know countries like Iran exploit for it like a wildcard which always backfires and destabilizes the region, which is bad for business.
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They are a wannabe Israel, a bad faith actor sowing chaos for geopolitical advantage. They've been spending money on Washington lobbyists to advocate for this war for a long time. And this isn't the only skulduggery they've been up to. They've supported the warlord Haftar in Libya and the genocidal RSF militia in Sudan.
They've hired American mercenaries to assassinate Islamist civil society figures in Yemen. They pay European right-wing influencers to spread anti Muslim content (yes you read that right). They are the buyer for conflict gold coming from the Congo. In short they are a problem.
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The US is bombing cities.
US-backed Israeli forces are already destroying Lebanon: https://www.msn.com/en-us/news/world/mapping-the-destruction...
> Legal experts, analysts and local officials warn that the ultimate objective is the “emptying of residential geography”, carving out a depopulated “buffer zone” at the forward edge of the border that permanently prevents displaced residents from returning and establishes a violently enforced demographic reality on the ground.
That's called "ethnic cleansing" when carried out by other countries. Iran will not agree to peace while this is going on. Partly because that's Iranian proxy forces in there among all the civilians getting killed.
I think you underestimate the impact of a blockade on Iran's ports... Iran (and China) can maintain this posture for ballpark a month or so more before economic mayhem leads to another popular uprising. Time is in the US's hands up until the midterms and even then until January
I think you underestimate how little economic pressure matters when people are up against an invader who attacked amidst negotiations for bogus reasons, threatened total annihilation, and killed thousands, including a school full of children.
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What happens when Chinese flagged ships dare us to shoot them?
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hmm .. imho .. the supply chain between Iran, Russia, and China is .. radically .. under-estimated in the equation by those states who have lost control over the worlds energy supplies.
It is more like the Western nations which cannot withstand another month of all this 'posturing' .. But there is some resilience to the idea that the Iran/Russia/China corridor is going to keep those nations relatively buffered from total disaster.