FRANKFURT, Germany (AP) — The decision by the United Arab Emirates to leave the OPEC oil cartel shook up the 65-year-old alliance that produces some 40% of the world’s crude oil and exerts major influence over the price of energy around the globe.
Following its exit in May, the UAE said in an announcement Tuesday, it plans to carry on with its long-held goal of increasing crude production "in a gradual and measured manner, aligned with demand and market conditions.”
Right now, that’s academic as far as oil prices go, since Iran is still blocking the Strait of Hormuz, which means much of the oil from Persian Gulf producers such as the UAE cannot be exported. But the departure could have long-term effects on oil prices.
Here's what to know about the UAE's decision to leave OPEC:
The Organization of the Petroleum Exporting Countries was formed in Baghdad in September 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. It has 12 members — counting the UAE — that hold more than 80% of the world’s proven oil reserves. Other members are Algeria, Equatorial Guinea, Gabon, Libya, Nigeria and the Republic of the Congo.
The group, headquartered in Vienna, aims to regulate oil prices by coordinating increases or decreases in production.
The goal has been to keep prices high enough so member governments can balance their budgets and reap the benefits of their natural resources — but not so high as to cause a recession in consuming countries or to halt energy-consuming activity, a phenomenon known as demand destruction.
That approach has sometimes drawn pushback from leaders in the U.S., where the price of gasoline is highly political. President Donald Trump at one point accused OPEC of “ripping off the rest of the world,” and his predecessor Joe Biden also badgered OPEC to produce more oil.
OPEC says its objective is “to coordinate and unify petroleum policies among member countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.”
The creation of OPEC signaled a change from a world in which Western companies dominated the oil market to one where the countries with the reserves took more control over their resources and profits.
At times, OPEC’s production moves have had large effects on the global economy. In 1973, its Arab members imposed an oil embargo on the U.S. and other countries that supported Israel during the Yom Kippur War. Oil prices quadrupled, and long lines appeared at American gas stations.
In 2016, OPEC joined with another 10 oil-producing countries, the largest of which is Russia, to form an alliance known as OPEC+.
The UAE is seeking more independence in how much oil it sells. Cartels keep prices higher, but they restrict members' earnings and market share against non-cartel members. There has been longstanding friction between the UAE and Saudi Arabia, the biggest OPEC producer and de facto leader of the cartel.
One reason for producing more now: Experts think oil consumption will peak in coming years as the world transitions to renewable energy sources that do not emit carbon dioxide, the greenhouse gas that fuels climate change.
That means barrels underground could be worth more today than they might be later, when oil consumption declines, so restraining production might mean losing out on profits.
The UAE’s withdrawal removes one of OPEC’s few members with the ability to quickly increase production — the mechanism through which the cartel manages oil prices, said Jorge Leon, head of geopolitical analysis at Rystad Energy.
“A structurally weaker OPEC, with less spare capacity concentrated within the group, will find it increasingly difficult to calibrate supply and stabilize prices,” Leon said. “The net effect points to a more fragmented supply landscape and a potentially more volatile oil market over time as OPEC’s capacity to smooth imbalances diminishes.”
Iran is blocking the Strait of Hormuz, the passage for tankers carrying a fifth of the world's oil and gas supplies. That prevents much of the oil produced by Persian Gulf countries such as Saudi Arabia and the UAE from getting to customers. For the short term, that's the biggest issue affecting oil prices, which have risen sharply as a result.
If the UAE achieves its goal of producing more oil after the war, that could speed a return to prices levels more in line with those before the war, said Michael Brown, research strategist at Pepperstone foreign exchange brokerage.
“As for crude in the here and now, all that really matters is whether the Strait of Hormuz is open or closed,” he said. “At present, it’s essentially shut, tightening supply conditions day by day and probably seeing benchmarks continue to grind higher on a daily basis as well.”
FILE - The logo of the Organization of the Petroleum Exporting Countries (OPEC) is displayed outside of OPEC's headquarters in Vienna, Austria, March 3, 2022. (AP Photo/Lisa Leutner, File)
WASHINGTON (AP) — Former FBI Director James Comey was indicted again on Tuesday, this time in an investigation over a social media photo of seashells arranged on a beach that officials said constituted a threat against President Donald Trump, according to a person familiar with the matter.
The criminal case is the second in a matter of months against Comey and is part of the Trump administration Justice Department's relentless effort to prosecute political opponents of the Republican president. The seashells photo was posted nearly a year ago, but the indictment was secured as acting Attorney General Todd Blanche, a Trump loyalist who previously served as his personal lawyer, aims to prove to the president that he's the right person to hold the job permanently.
The fact that the Justice Department pursued a new case against the ex-FBI director months after a separate and unrelated indictment was dismissed could open the government to claims of a vindictive prosecution and to arguments that it is going out of its way to target Comey, who had overseen the early months of an investigation into whether the Republican president’s 2016 campaign had coordinated with Russia to sway the outcome of that year’s election. Comey was fired by Trump months into the president’s first term, and they have openly feuded ever since.
The charges in the latest Comey indictment, confirmed to The Associated Press by a person who was not authorized to publicly discuss the matter, were not immediately known. Comey's lawyer did not immediately respond to a request seeking comment Tuesday, and a Justice Department spokesperson did not immediately comment.
The prosecution arises from a May post on Instagram in which Comey shared a photo of seashells he saw on a walk in the arrangement of “86 47.” He has said he assumed that the numbers reflected a political message, not a call to violence. Comey deleted the post shortly after it was made, writing: “I didn’t realize some folks associate those numbers with violence” and “I oppose violence of any kind so I took the post down.”
Nonetheless, Comey was swiftly interviewed by the Secret Service after Trump administration officials asserted that he was advocating the assassination of Trump, the 47th president.
Merriam-Webster, the dictionary used by the AP, says 86 is slang meaning “to throw out,” “to get rid of” or “to refuse service to.” It notes: “Among the most recent senses adopted is a logical extension of the previous ones, with the meaning of ‘to kill.’ We do not enter this sense, due to its relative recency and sparseness of use.”
Trump, in a Fox News Channel interview in May, accused Comey of knowing “exactly what that meant."
“A child knows what that meant,” Trump said. "If you’re the FBI director and you don’t know what that meant, that meant assassination. And it says it loud and clear.”
The former FBI director was indicted in September on charges that he lied to and obstructed Congress related to testimony he gave in 2020 about whether he had authorized inside information about an investigation to be provided to a journalist. He denied any wrongdoing, and the case was subsequently dismissed after a judge concluded that the prosecutor who brought the indictment was illegally appointed.
Comey was the FBI director when Trump took office in 2017, having been appointed by then-President Barack Obama, a Democrat, and serving before that as a senior Justice Department official in President George W. Bush’s Republican administration.
But the relationship was strained from the start, including after Comey resisted a request by Trump at a private dinner to pledge his personal loyalty to the president -- an overture that so unnerved the FBI director that he documented it in a contemporaneous memorandum.
Trump fired Comey in May 2017 amid an FBI investigation into potential ties between Russia and Trump’s presidential campaign. That inquiry, later taken over by special counsel Robert Mueller, would ultimately find that while Russia interfered in the 2016 election and the Trump team welcomed the help, there was insufficient evidence to prove a criminal collaboration.
Blanche was elevated earlier this month from deputy attorney general to acting attorney general, replacing Pam Bondi, who had frustrated Trump with the department's struggles to build successful criminal cases against his adversaries. Blanche since then has moved quickly to announce politically charged prosecutions, including a case last week against the nonprofit Southern Poverty Law Center, which is accused by the Justice Department of defrauding donors by paying donors to infiltrate hate groups. The group has denied any wrongdoing.
Comey is among many Trump foes to face scrutiny over the last year.
The Justice Department, for instance, is also pursuing a criminal investigation into former CIA Director John Brennan, another key figure in the Russia investigation -- one of Trump’s chief grievances and a saga that he and his supporters have long sought retaliation for. Brennan has denied doing anything wrong.
CNN was the first to report the second indictment against Comey.
Follow the AP's coverage of former FBI Director James Comey at https://apnews.com/hub/james-comey.
FILE - Former Director of the Federal Bureau of Investigation James Comey at Harvard University's Institute of Politics' JFK Jr. Forum in Cambridge, Mass., Feb. 24, 2020. (AP Photo/Charles Krupa, File)
FILE - Former FBI Director James Comey speaks to reporters on Capitol Hill in Washington, Dec. 17, 2018. (AP Photo/J. Scott Applewhite, File)
