Oil Prices Drop
“The offer of more barrels to the market by the UAE and Iraq — the catalyst for Wednesday’s worst oil price drop in two years — has more to it than meets the eye. The UAE will be ‘encouraging OPEC to consider higher production levels,’ said its ambassador to the US, Yousef Al Otaiba., while Iraq’s Oil Minister Ihsan Abdul-Jabbar Ismail says: ‘If OPEC+ requires it, we can increase output.’
"That said, Saudi de facto leader Mohammed bin Salman has made it clear that his rivalry with President Joe Biden is greater than helping consuming countries offset the priciest oil in 14 years. It will take him a lot to be persuaded otherwise.
"The UAE, like Saudi Arabia, is technically a U.S. ally that most recently received additional U.S. military defensive support to help them against Houthi threats from Yemen. But the UAE has also been calling on the United States to re-designate the Iran-backed militia on the Foreign Terror Organization list, which the White House appears unwilling to do.
"The demand that Tehran’s Islamic Revolutionary Guards Corp stays off Washington’s terror list is one of those put by Iranian negotiators to the nuclear talks with world powers. The talks that have dragged on for months are at their final stages and could pave the way for the legitimate return of Iranian oil to the global export market, without the U.S. sanctions they have faced since 2018.
"It remains to be seen if the Emiratis will insist on their demand for the re-designation of the IRGC as a terror group as a condition for meaningfully adding to their oil supplies."
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