Thursday (July 8th): MBZ blocks OPEC

Mohamed bin Zayed Al Nahyan (MBZ)

Name? Mohamed bin Zayed Al Nahyan (MBZ)

Westphalian identity? Emirati

Age? 60

Why is he in the news? At the OPEC meeting two days ago, MBZ caused a diplomatic upset when the UAE publicly disagreed with Saudi Arabia’s proposal to increase oil output. Because OPEC decisions must be taken unanimously, the meeting was cancelled and has not yet been rescheduled. MBZ explained that the planned increases were not enough and unfair to the UAE.

Why do we care? Because the UAE and Saudi Arabia, or MBZ and MBS, usually agree on everything publicly and sort out differences behind closed curtains. This disagreement marks a first and symbolizes an increasing economic competition between the two countries for the same pool of investors. As MBZ and MBS are aiming to diversify their countries’ economies away from oil towards more sustainable streams of income, they are both looking at the same piece of cake, realism at its best.

Why should you care? Because disagreements among OPEC + members usually lead to an increase in oil prices. Just yesterday the oil price went up to 77 dollars per barrel, the highest in 3 years, in response to MBZ’s decision. On top of inflation sneaking up on us, disrupted supply chains, and a boom in demand as countries open up, this all will increase the prices of the everyday products you consume. We assume you care 10/10 about how much you pay for your next iPhone. 

Who else cares? The rest of the OPEC members, represented by the President of Nigeria Muhammadu Buhari, are not happy about this. All their economies have struggled due to the impact of the pandemic and increasing oil output also increases revenue for them.

Any further comments? While this disagreement has been made public by MBZ it does not seriously put his relationship with MBS at risk. Their only disagreements are of economic nature, on security and political matters they are still very much aligned.

Joshua Dario Hasenstab

General Coordinator