UAE quitting OPEC means:
· No change in oil prices or oil supply in short term as UAE oil outlets are constrained by Gulf blockades.
· Long term UAE oil output could painlessly double to 6mn bpd. This would add 15% to total Gulf output and 2% to world oil supply. Given inelastic oil curves this could depress global prices by 5%-8%.
· The long-term effects are not sufficient to reverse the rush to Renewable energy which depends on a risk adjusted oil price of US$85-US$95/bbl. And a need to reduce dependence for energy that is at risk from chokepoints and geopolitically volatile producers.
· The breakdown of OPEC also heralds the collapse of the political framework that underpinned it. New treaties will evolve under the shadow of an Iran that has been strategically empowered by the war while losing it militarily. Some of these treaties will entail nuclear proliferation. But they will not bring stability to the region.
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