Liam Denning, Columnist

The Minuses of OPEC+ Are Exposed by the UAE

As the old certainties that underwrote the cartel slip, a key member is preparing for a world in which oil demand could peak, with consequences for the entire group.

July 6, 2021 at 12:25 PM UTC

By Liam Denning

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

The UAE is acting a lot like it foresees an expiration date for OPEC, plus-size or otherwise.
Photographer: Stefan Wermuth/Bloomberg

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The genius of the OPEC+ brand is that it literally spins a negative as a positive. OPEC’s expansion in late 2016 wasn’t a case of groupies clamoring to gain entry to the club; rather, an old institution fallen on hard times sought fresh supporters. Since then, it has worked best the way the old OPEC worked best: with its back to the wall. When Covid-19 hit last year, OPEC+ called ceasefire on a barely-begun price war and slashed production.

A year or so on, oil is back up to almost $80 a barrel, but the club is unhappy again. And it’s for the same underlying reason. You could call that reason the energy transition but it’s more of an everything transition.