The REAL reason UAE left OPEC - explained by Andreas Krieg

The United Arab Emirates announced that it was leaving the Organization of Petroleum Exporting Countries, better known as OPEC, on Tuesday. >> It's been about 10 years since I last attended an OPEC meeting. And this is a massive story. The UAE leaving OPEC. >> The move would allow it to control its own oil output rather than adhering to the organization's production quotas. The move is seen as a major blow to OPEC's ability to influence global oil prices given that the UAE accounts for 13% of its total output as its third largest producer. It's also seen as a sign of dissatisfaction with Saudi Arabia's policies over production control, with which the Emirates has long disagreed over quotas. The UAE has also been critical of regional countries for not taking a stronger stance on Iran's attacks on Gulf countries during the USIsraeli war on Iran. So why has the UAE chosen to exit the group now? And what does it mean at a time when regional relations are already strained by the USIsraeli war on Iran? Here to answer those questions is an expert on Emirati foreign policy and on the region, Dr. Andreas Creek. Dr. Andreas, thank you so much for speaking with us today. >> Thank you for having me. >> So, I want to begin with the latest news that the UAE has chosen to leave OPEC and OPEC plus. It's long been dissatisfied with these production quotas. That's no secret. Why now? >> Well, not only have they been long dissatisfied with the quotas, but they've also have a long track record of actually not abiding by them and doing their own thing anyway. So, it doesn't necessarily have only a geoeconomic angle. Has a very strong geopolitical angle as well. Um the UAE is currently in a position of trying to redefine their status and their position within the wider security framework of the region. Trying to define multilateralism, trying to define their position visa v the GCC, other multilateral organizations. And from what has come out over the last couple of days, they seem to revise multilateralism and review every single relationship with other international organizations. OPEC just being one of them. But OPEC was probably the the first step and the easiest one to withdraw from because number one, it makes economic sense and B, they've been kind of testing the waters for quite some time. And you could also make the argument it doesn't hurt Saudi in the short term as much as it might hurt Saudi in the long run. So doing it now uh is it comes with far less pain for RIA than than expected. >> I'm interested in what you said about revising its position on a lot of multilateral frameworks in the region. Um this withdrawal was kind of teased by a few Emirati commentators who had hinted that a big announcement might be coming. Um an Emirati commentator Tara Alba had written this piece about the you know hollow promises of Arab Solidarity and kind of hinted in it that you know the UAE could consider its ties with the Organization of Islamic Countries, the OIC, um the Arab League, maybe even its position within the GCC. How do you think this departure from OPEC could lay the groundwork for kind of future consideration of its position in all these organizations? >> I think what what the UAE is trying to achieve here is trying to play its Makavelian card. It sees itself as an ultra realist national interest driven entity. Uh especially Abu Dhabi has always been about what serves our interest. Um and when it when win-win serves us, then we pursue a win-win. If it's zero sum, we'll pursue zero sum. there's been a a very long sort of history of what I call weaponized interdependence where they create relationships when it suits their interest but in always in a way kind of skewed in their in in their favor. And so some of these multilateral organizations that you mentioned uh you know the Arab League or the OIC um or even the GCC um are organizations that were not really there and haven't really shown any meaningful impact uh on protecting interest amati interest in this war with Iran which is not what they were designed to do. I mean the Arab League wasn't designed to do it. The OIC wasn't designed to do it. The GCC has a clear security angle and I think when these announcements were made two days ago where they were saying there's a big announcement coming tomorrow I was thinking oh my god I hope they're not going to take a really radical step of reviewing their relationship with the GCC. So we haven't gone there. Um but you know you could make the case that most of these multilateral organizations are talking shops anyway. >> I suppose yeah the the effectiveness of those organizations is one thing. I guess the Emirati repost to what you're saying would be well you know organizations like OPEC or the GCC they've always kind of been you know been dominated by Saudi Arabia due to size and so they see it as you know a leveling power or like a force amplifier for them if they partner up with say uh the US or Israel or look to outside the region for closer ties to kind of you know bolster its own position rather than risk kind of joining you know being closer tied with those multilateral frameworks and risk, you know, playing second fiddle or being number two. How do you see that? >> I mean, there's been that's been a dynamic. It's been going on for a long time. This this issue of Saudi obviously in the 1980s when the GCC was created, Saudi was the big brother. Um the smaller Emirates, so the UAE, Qatar, Bahrainians and Kuwait, they were kind of junior partners to Saudi Arabia. that has been this relationship has changed because obviously especially cut on the UE have completely changed who they are how they see themselves how they punch sometimes above their weight as well. Um and so but the countries have found a different way of of kind of red imagining that relationship. The Emirati Emirati always tried to find a way to create more autonomy more sovereignty away from Saudi Arabia even at the expense of Saudi Arabia. The difference here is the country see themselves as a small state and they're quite happy to be a small state while the Emiratis have the ambition of being a middle power on par with Saudi Arabia. So they see this competition with Saudi Arabia as something they can actually pursue and potentially win. The Abram Accords are also part of that. The Abram Accords were a way of creating a potentially multilateral framework that the Emiratis control. One reason by the way the Saudis will never join the Abram Accords. They might normalize with Israel, but they will never join the Abramac Accords because they're ultimately an Emirati entity and they would become subservient to the Emiratis. So, it's that sort of competition that's at the heart of also the decision of going getting out of OPEC of saying we want to make our own sovereign decisions and we, you know, at this current moment of friction with Saudi Arabia. We can't afford following >> Riyad. >> As you know, that competition is taking place in economic arenas in the diplomatic sphere. as you say, kind of the Abraham Accords trying to maneuver its own realm of influence away from from Saudi policy. Both have also notoriously kind of competed for the affections of the Trump administration. Um, you know, offering investments and and so on. Um, we know that recently the United Arab Emirates requested this currency swap line with the US less out of arguably a financial need than to kind of signal political closeness. Um and you know the Treasury Secretary so far has responded relatively uh positively to that request. Um how do you see kind of the UAE's doubling down on its relations with the US and choosing to signal closeness visav Saudi? Do you think that's also kind of like feeding into this this sense of competition? >> Well, this competition in the Gulf in general has been for a long time who's closest to Washington. If you look at it, remember back to the the Gulf crisis, the blockade of Qatar, that was also competition between who's closest to the Trump administration won. Um, this rift between Saudi and the UAE as well as a competition of kind of curring favors with the Trump administration, who is closer to Trump, between Saudi Arabia and the UAE. I think that all plays in. I think a lot of what the Emirates are pushing out now is about a narrative. The narrative of we're doubling down on the US. We're doubling down on the relationship with Israel which is geared towards the audience in the United States, not necessarily the East or even the Arab world where this would be seen as far more contentious. We look at you know that at the same time the Am I have had a relationship with China and obviously doubled down on that as well. And this currency swap was also part of signaling us saying look give us the you know dollars mean show that you mean business. uh we've supported you for quite a long time now the Trump administration now we want something from you please deliver it or else it's also again part of that interdependence element of kind of creating interdependence but also trying to find a route to weaponize it how to extract leverage from interdependence to again serve national interests but it's not a one-way street the Imiratis are pivoting both ways I mean they still have a very strong relationship with Russia they have just doubled down on a relationship with China and also and they're saying this is not fundamentally diametrically opposed still have that very intimate relationship uh with the United States. But the swap deal and also the withdrawal of OPEC, there is an element of it of saying if the United States had a problem with OPEC or OPEC plus and their limits on production. Um we will no longer be beholden to that we can do whatever the US wants us to do and produce more in order to bring prices down for example. Again, none of that makes any difference in this war with Iran, but it could make a difference further down the line. I imagine though despite this closeness with the US and kind of extracting those concessions, there must be a great deal of insecurity right now given the extent of Washington's control over relations with Iran, the direction of the war, the outcome of control over the Strait of Hormuz. We know Mr. Trump to be quite a transactional figure. Uh there's been reporting that, you know, uh intelligence agencies are testing what possible Iranian reactions could be if the US kind of unilaterally just declares an end to this war. So, we know that the US focus going into negotiations with Iran, is perhaps a great deal narrower than the Gulf States, not just the UAE, would hope for it to be. Is there insecurity that, you know, uh, Trump's attention span, Washington's demands, could really fall short of what the UAE and and its neighbors have hoped for? >> Yes. And and I think that's that's probably the most problematic and possibly even the most realistic scenario right now is that there might be some sort of interim deal with Austral. But the war kind of and the key grievances of this war being unresolved. Obviously the worst case scenario being that the stra stays closed as well or being highly degraded in terms of the flow that is that is required to keep it viable. Um and Trump just walking away from this problem and leaving the GCC to its own devices. So again, the UAE have been trying to use that leverage that they might have had um with Washington to get their way. The problem with the transactionalism of the Trump administration, that's a problem for all the GCC states, is the fact that it's a it's a very poorly designed transactionalism when the guy that you're trying to create a transactional relationship with, Trump, is irresponsive and doesn't keep his side of the bargain. Right? He took the $3.6 trillion that were given by GCC countries collectively to Trump. Um but he's not actually delivering anything. it wasn't listening to any of the the warnings. The problem now is that the UE kind of going onto a different direction. They're saying everything has to be re revised um including our sort of held assumptions about Iran and maybe the war actually has to continue for us to actually finish the job which I find a kind of highly problematic statement and in my opinion far removed from reality because I don't think there is a military solution to it. >> You know, all of the Gulf States economic models have taken a hit throughout this war. that image of stability really being threatened by missile attacks from Iran. At the same time though surely to a degree their economic model and specifically the UAE rests on a degree of neutrality uh you know not hawishness um given especially that the UAE has long been a place for you know money from uh Iran from Russia and and and so on. It kind of opens itself up as this sanctions haven um that doesn't you know discriminate. Surely taking such a clear stake coming down so clearly on one side would threaten that model even if hostilities do end. Surely this would would go against that. >> You know if you look at you know in Dubai for example it's a service-based economy. Dubai relies on business before politics and business is more important than politics. They've always maintained these kind of networks and relationships and as a service-based economy they can't do without them. They need stability to thrive. There is a slightly different approach in Abu Dhabi because Abu Dhabi is based most of their model obviously is about selling oil and energy but it's a proper rentier economy and as long as that can be sold you can make money um and you if it's not just energy you have that sovereign capital that they have invested again that is generating money overseas Abu Dhabi can weather the storm for slightly longer than Dubai in terms of the current pressure and the current status quo and so that friction that we see within the Gulf is also a friction that we see internally in the UA Interesting. And um speaking of that of that friction, there were a lot of expectations at the start of this war that kind of previous riffs between Saudi and the Emirates would kind of be papered over under a shared threat. That clearly hasn't happened. They've had very different threat perceptions of of how to deal with this issue. Um before the war there was talk of kind of an emerging Abrahamic versus Islamic coalition when instead of uniting different countries within the GCC would instead look to different external part partners. So the UAE as we've mentioned with the US, Israel to a lesser extent, India, um and then Saudi Arabia towards Turkey, uh uh Qatar, uh Pakistan even. Um do you see that as the more likely coming uh regional coalition or coalitions rather rather than kind of the GCC being an effective united actor? I think the number one priority for the GCC is have a united GCC approach to this because that again prisoners of geography. You might have a relationship with Pakistan but Pakistan is in on the other side of of the strait. It's you know it's in more central Southeast South Asia than it is part of of of Arabia. Um so you you need to first of all make have an arrangement with the people who are right next to you. That's about it's about proximity. It's first and foremost the six Gulf countries. But it's also Iran on the other side of it. You can't ignore the Iranians. They're still there. Um I think that's the number one preference. Is it likely going to happen for the reasons I outlined? Not very likely. There are there are a lot of points of friction within the GCC. Um Turkey, Pakistan, you know, if you look talk about the Sunni alliance, some people have talked about this um potentially containing Iran I don't think is necessarily a good option in the long run because there are you know at the moment there seems to be quite an overlap of interests and values. But if you you know this over time because of the the lack of proximity in geography that is likely going to shift into different ways because Turkey might have their own position and Pakistan might have their own position. Um it's certainly something that is being pursued as everything else is being pursued because everyone is very desperate to find a solution to it and clearly the UAE with inviting the Israelis over with the Iron Dome them working with the Israelis in Somali land as well. Um there is clearly a a very an alliance that's being built between the UAE and Israel. They're doubling down on this rather than backing out of it. Um and most of the narrative suggests that that's what they're doing as well. I just can't see I don't think it's a smart idea from an Abu Dhabi point of view to doubling down on a relationship with a country such as Netanyahu's Israel in particular. um when you do have a potential much more resolute more robust sort of relationship with your neighbors right next door who you share the religion with the the border with the family with the tribes with um the language with but it certainly looks like this on the surface >> it strikes me that the divisions you're describing here obviously this isn't the first rift within the GCC infamously there was the blockade of Qatar a matter on which the UAE and Saudi were aligned in 2019 and uh obviously people point to that as kind of evidence that oh well these disputes are common. From what you're describing though this seems as something a little deeper and more long-term than the rift with Qatar and previous rifts in the organization. Do you see this as something of a death nail for the GCC or do you think this is a similar period where there were divergences but ultimately as you described geography demands that they will eventually reconcile? >> No, geography demands they need to they they need to reconcile. Um it's just there is there is a constant state of conflict between these six countries is unimaginable and is also not feasible because all of them have the same need for stability and security and they kind of they might have a different ontology and philosophy of how to define security and how it looks like but ultimately they want the same thing. Um and they do share there's interconnectivity that you can't just cut and that's also not something the UAE want to do. It's something that we've seen in the in the blockade with Qatar as well. it was impossible to do despite the fact that Qatar was a peninsula far more easy to isolate than geographically than than the UAE. So no, I think that the Gulf is going to um be there. It's going to be sustained. But the point is if and we have the same problem with the Arab League. might have this joint organization but when all the different members you know these organizations are only as strong as the members and if you have individual members pivoting away from the consensus it will make this organization no longer you know operational and and effective and that's kind of the concern that I have that you know everyone's pursuing their own uh their own sort of independent um strategies in this but ultimately the problem that Saudi has with the UAE is really I mean among certain economic issues which is more competition. Competition isn't a problem. It was always there. But the fundamental ideological problems are really the relationship with Israel. The fact that Israel is using the Abra as a as a tool of divide and rule of creating an alternative access to, you know, a Saudiled framework. That's something the Saudis cannot live with and they don't want to live with. It's also it's also something that the other smaller GCC countries who have had their own reservations towards Saudi Arabia, Oman, Qatar have said we're siding with Saudi Arabia on this because we don't want this to be a region where a country like Israel and it's not just any Israel. It's the Israel of Netanyahu. It's the worst form of Israel um that we've ever had from a Gulf perspective. They don't want that them to dictate the terms of where the region is going. And it was ultimately the Israelis who imposed this war on the region. Um more so obviously the Iranians played their part in this, but it was the Israelis who imposed it on them. >> Yeah. And notably, you know, many foreign countries have said that any kind of normalization with Israel is something of a non-starter with Netanyahu's government and uh for for obvious reasons. Um given given that Fischer, as you've said, the UAE's position has put it out of touch with much of the Arab street in terms of views of Israel. It's also meant that it's less well placed to be involved in diplomatic proceedings in the same way that Saudi Arabia has, um Pakistan, Turkey, as we've mentioned. When we look at the outcome of this war, um do you think that ultimately firstly Gulf considerations to the extent that there there are collective considerations to be spoken of will be included in any final settlement given the fear that kind of you know the hormuz will you know the straight of hormuz will drown out all other uh concerns and secondly given Saudi's proximity to the process do you think it is Saudi Arabia's conception of regional security or Qatar or others that will take precedence in terms of you know the terms that are finally agreed if there are terms agreed between the US and Iran. >> No, I mean what's happening between the US and Iran sits on a unfortunately a different uh completely different sheet of paper than what the what the Gulf would want from this from this sort of dialogue. Um, and I I'm also not very confident that we are getting to a to a final agreement anytime soon because there are maximalist positions being put forward that need a lot of hard work to basically chip away from to get to something that looks like a consensus, a ven diagram where both pe both sides actually agree on on a joint position. We're far far away from that because of the egos involved. So someone like Donald Trump who has no you know attention span, someone like the Iranians which are now run by the IRGC but the most heartline less compromising least pragmatic sort of IGC regime we've ever had in Iran. For them to come to an agreement is not just going to be something that's been kind of bashed out in a in a I don't know in in a day which is what JD Vance was intending to do. So that that sits on a that's a different different track. Obviously Saudi Arabia and Qatar have tried to influence this process. You know, they've been uh present in in in Islamabad. They've been able to speak to the various parties trying to bring them together. A lot of back channel talks have happened before these talks in Islamabad actually happened. The problem with the Pakistanis though is the Pakistanis are unable to do the they don't have the sort of long track record of mediation that let's say the cuties have or the Omanis have >> and lack the leverage to >> and lack any leverage and they all they do is like here is a room sit down and speak to one another. Um but I don't I don't I see a lack of innovation in terms of pro you know innovatively finding a solution to some quite wicked problems. Um, and so we might see this this whole process pivoting back to the Gulf eventually when Kasa and Oman are ready to play a role in this and end up being invited to do so. But Trump has an interest to keep this a a US Iranian issue. Getting the Israelis out of the room and the Gulf out of the room and doing his own thing what serves American interest. That's ultimately what MAGA is all about. Making America great again. It's America first. Um, America first also comes at the clearly at the um interests or at the expense of the Gulf countries. Uh, and so none of the Gulf countries are in any position, not the UAE, not the Saudis, not the countries, not the Omanis to put any to impose any terms on this. Um, I think what we can hope for now is that we first and foremost the most pressing issue now is no longer the nuclear issue, right? Because that is something that we've almost solved in a way. I mean there's there there a couple of courses of action a couple of scenarios uh where we can where we can move forward on the issue because we've negotiated over this issue 50 times of back and forth in February we've already came very close to a compromise on the nuclear issue. The issue now in the room that we haven't discussed where we don't really have a you know we haven't really thought about how a solution would look like is the strays of hummus and freedom of navigation. That's the one thing and that's a problem we didn't have in February. It's a problem that was caused by this idiotic war. Um, so finding a solution on this or to this problem is probably more of a pressing issue for the global economy and also for the Gulf States than it is for Donald Trump per se as an individual. So he might say, well, let's play let's see how where we are in six weeks time or in two months time at which at what point the cost on the global economy will be immense. Cost on the Gulf economies will be immense and also the cost on the Iranians will be immense. and he might be willing to sit this one out because that's the way he works. That's the way Donald Trump works. That is the that's a very bad outcome for the Gulf States and neither side of the divides that we just outlined will have any real leverage over you know creating something that will bring bring us a solution to this >> and very bleak uh outlook already. Just lastly before we close um you've mentioned kind of the US Iranian track is very separate uh in terms of everyone in the region ironically is being kept out of the room say there is some kind of termination to hostilities there's a deal over Hormuz potentially the nuclear eventually I imagine Iran and the Gulf states will have to sit down together separately from Trump and find out basically how they're going to coexist in the region um issues of you know Iran's missile and drones. Uh it's allied militias in the region. Um what do you expect that kind of a security arrangement could look like? Um and is it one that leaves Thran emboldened? Um or is it one where it shows actual pragmatism and realizing that it, you know, it it has to reconcile with its Gulf neighbors? How do you see that uh relationship uh resolving itself, especially given, you know, a lot of the harsh uh words from Iran and maximalist demands about US bases in the region? >> Look, the elephant in the room is still Israel, right? They're the ones who will ultimately derail and spoil. They're the biggest spoiler in all of it. At the same time, we got a narcissist surrounded by sick fans in Washington, in the White House, Donald Trump. Not a good negotiator, terrible when it comes to making a deal despite all the books he's written on it. And then on the other hand, we've got a highly unpragmatic maximalist and I maybe less ideological but certainly heartline regime IRGC regime in Iran. So these three ingredients already are very bad for finding a solution. Then you've got the Gulf states who do want to pragmatically engage the Iranians um because they understand there is no alternative to this. But then the GCC states exist on a spectrum as well in terms of how they see this going forward. There is no alternative to having a relationship with your neighbor whether you want to or not. In the same way that in the cold war the Washington and and Moscow needed to have some sort of back channel line to speak to one another. Um now I think the positions differ from the Omani position on one end of the scale who are saying let's create a a a joined framework including the Iranians security framework which is an absolute no-go at the moment for the other five states I would say. And on the other end of the spectrum, we've got the Emirati who are saying no relationship with the Iranians. Maybe some back channel here and there, but ultimately it's about deterrence. It's about force force projection and using force if necessary collectively to contain this Iranian threat. Uh maybe with Israeli support, maybe with American support. And then you've got, you know, Katya and Saudi somewhat in the middle. And I mentioned the two of them because they are actually working together. They are the only ones who are actually currently trying to build an off-ramp, trying to find a solution to this. take into account Iranian aggression but also taking account Israeli aggression and trying to find a middle road and being quite active about it and using all their networks. Kuwait and Bahrain unfortunately are not playing any role and Bahrain is also very maximalist in their position probably close aligned uh with the with the Emirati position but then again Bahrain is so small that it is insignificant in that wider scheme of things and Kuwait being entirely passive despite the fact that they've been really hard hit um by this war. Uh and so if you see all that spectrum, it shows you how complicated it's going to be to find a GCC position. And just to go back to what happened yesterday in Jedda, um where you know, you had this extraordinary GCC summit. The Omanis didn't show up. Um the Amiratis send the the second guard. U it it it seemed to have lacked the ability to convene. Actually, the Saudis showed a lack of ability to convene the necessary people. So it's going to be a long long process. And I'm not I don't think there are going to be any easy solutions. >> Yeah. And certainly if a if a threat and a crisis of this magnitude doesn't have that convening and and consiliatory power, I wonder what will. Dr. Andreas Creek, thank you so much for speaking to us today. It's been a pleasure. Pleasure.