The friction between Saudi Arabia and the United Arab Emirates that had held oil markets hostage finally ended last week, with an announcement that the Emirati quota from which production cuts are calculated will be increased.
Thus ends the latest drama within the ranks of OPEC+, but the curtain did not fall before giving us a preview of how that consortium is likely to ultimately unravel. The trigger won’t be the historical and political tension between the two Gulf powers, but their opposing views of the coming global shift away from fossil fuels and the way in which they can best protect their interests during the energy transition.
The Saudi-UAE spat is part of a longstanding pattern of disagreements. Although the two countries are aligned in many ways, the relationship has been peppered with friction from the outset. Territorial disputes marred the early years of Emirati independence after 1971, and a treaty allegedly resolving the issues remained contentious for decades.
In the mid-2000s, Saudi Arabia thwarted efforts of the UAE to build a causeway from its territory to Qatar. Even more acrimonious was Emirati action in 2009 to scupper the Saudi project of a pan-Gulf currency, after the UAE lost the battle to host the monetary agency in its country.
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