Recently, there has been a dramatic swing in the international crude oil market. First, the Wall Street Journal claimed that the UAE was considering exiting OPEC, causing international oil prices to fall sharply by nearly 3%. However, the Reuters report subsequently denied this claim, and international oil prices also rose again.
From a purely economic point of view, it is natural that international oil prices fluctuate because of developments involving the important oil-producing country of the United Arab Emirates. But from a political point of view, this seems somewhat unusual, and it could even be said that it is a deliberate US tactic to provoke Middle Eastern oil producers.
According to the Wall Street Journal, the reason the UAE is considering withdrawing from OPEC is because of dissatisfaction with OPEC production cuts that Saudi Arabia has been leading all along, which has led to some tension between the two countries.
In the second half of last year, US President Joe Biden personally visited Saudi Arabia with the aim of persuading Saudi Arabia to increase oil production in order to counter Russia in the international oil market. Russia's fiscal revenues are largely dependent on oil, and if oil supplies increase and prices fall, it will have a huge impact on the Russian economy.
However, Biden has encountered some difficulties in front of Saudi Arabia. On the one hand, the contradictions between the United States and Saudi Arabia are deepening, especially after the murder of journalist Khashoggi was exposed, the United States once regarded Saudi Arabia as a "pariah state", and some US lawmakers even called for sanctions against Saudi Crown Prince Salman Jr.
On the other hand, from the perspective of economic interests, Saudi Arabia and Russia, as oil producers, take similar positions on the issue of oil prices. Increasing oil supply will lead to a decline in international oil prices, which is not good for Saudi Arabia.
If oil prices are high, Saudi Arabia can make more profits with less oil production. However, if oil prices fall, Saudi Arabia will have to increase oil supply to earn profits from previous high oil prices. Therefore, Saudi Arabia rejected the US request, which is understandable in economic logic.
However, the United States has always been hegemonic and has found it difficult to tolerate Saudi resistance. Therefore, the United States began to take various ways to try to recalibrate its relationship with Saudi Arabia, threatening and inducing Saudi Arabia to change its position.
Recently, the US media has reported on the UAE's dissatisfaction with Saudi Arabia's production reduction policy, and rumors that the UAE may withdraw from OPEC. Such reports of sowing discord and fanning the flames are clearly politically motivated.
Although the UAE is also an oil producer and a brotherly country with Saudi Arabia, there are some differences in political interests, especially on Yemen. However, their interests are highly aligned on the issue of reducing or increasing oil production.
Saudi Arabia is reluctant to increase oil production, and neither is the UAE. But for the UAE, its economy is relatively small and its oil reserves are not as rich as Saudi Arabia, so its impact on the international energy market is relatively limited. In the face of US pressure, Saudi Arabia can directly refuse, but the UAE may not have the ability to do so.
Therefore, it is not uncommon for the UAE to choose to shift the blame to Saudi Arabia. After all, Saudi Arabia, as the leader of the Middle East's oil producers, has a responsibility to shoulder some of the burden for other smaller Middle Eastern countries.
However, the US media reported the UAE's apparent dumping behavior as fact, which is thought-provoking.
To some extent, the US approach is a tactic to express dissatisfaction with Saudi Arabia and even threaten Saudi Arabia. The underlying implication is to warn Saudi Arabia that if Saudi Arabia continues to go against the United States on the oil issue, the United States may exploit the differences between Saudi Arabia and other oil producers to split the OPEC organization and reduce Saudi influence around the world.
However, there is a gap between what the United States intends and what it actually does. Because compared with the news reported by the US media, the UAE maintains a similar trend to Saudi Arabia in domestic and foreign policies.
The most obvious example is the expansion of trade relations between the UAE and China. Recently, there were media reports that China will export L15 trainers to the UAE, while the UAE will buy Chinese AR-3 rocket artillery systems.
Between China and the UAE
Military trade is clearly not in the interest of the United States. If the UAE really intends to increase oil production, or even quarrel with Saudi Arabia, withdraw from OPEC and get closer to the United States, then why is it strengthening military trade with China?
In addition, the UAE's active development of relations with China and the promotion of diplomatic relations between China and Arab countries with Saudi Arabia are also a noteworthy sign. In fact, so far, there are no clear signs of serious disagreements or rifts in the relationship between the UAE and China.
To sum up, the news that the so-called UAE is considering withdrawing from OPEC is likely to be a tactic by the US media to intimidate Saudi Arabia, aiming to warn that if Saudi Arabia is not aligned with the United States, the United States may take advantage of the contradictions between Saudi Arabia and other oil-producing countries to weaken Saudi Arabia's influence in the world. However, the relationship between Saudi Arabia and the UAE is closer than that between Saudi Arabia and the United States, so it remains unknown whether this US strategy will work.
In the end, the future of the international crude oil market remains uncertain. International political and geo-economic factors will continue to influence oil prices, and the game between oil-producing countries will continue to evolve. In this volatile environment, vigilance and informed decisions are needed to ensure the stability and sustainability of international energy markets.