The United Arab Emirates is discussing leaving the Opec oil cartel, writes the Wall Street Journal on Friday afternoon.
Oil prices fell sharply following reports that the United Arab Emirates (UAE) is discussing leaving the Opec oil cartel.
It was Wall Street Journal who first reported the discussions, and refers to anonymous sources. The news has not been confirmed by open sources.
At 15.16 a barrel of North Sea oil costs USD 83.3, and is down 1.2 per cent for the day. The price of American light oil is 76.7 dollars, and is down 1.5 percent.
Oslo Stock Exchange fell at the same time as the oil price, and the main index is down 0.3 per cent.
At 16:00, both the oil price and Oslo Børs recovered.
Opec stands for Organization of The Petroleum Exporting Countries and was established in 1960. The organization is led by Saudi Arabia, and consists of Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador , Gabon, Angola, Equatorial Guinea and Congo.
By being a member of Opec, the FAE is obliged to pump much less than it is capable of, which hurts oil revenues. The country has long pushed to pump more oil, but the Saudis have said no, writes the Wall Street Journal.
According to anonymous sources, the FAE is having an internal debate about leaving Ope – a decision that would shake the cartel and undermine its power in global oil markets.
Why is Opec important?
Opec has in recent years been expanded to Opec+, which consists of the member countries above and ten other cooperating countries.
OPEC’s goal is to influence the price of oil in a way that serves the interests of the member countries. In practice, this is about avoiding the price falling too low, but also striving for it, and thus also the member states’ incomes, to fluctuate as little as possible.
The organization is important because it has influence on the oil market.