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US President Donald Trump on Wednesday welcomed the United Arab Emirates' decision to exit the OPEC and OPEC+ alliance, saying the move could help bring down global oil and gas prices.
"I think it's great. I know him very well, Mohammed. He is very smart. And he probably maybe wants to go his own way. That's a good thing for getting the price of gas down, getting oil down, getting everything down. They have it all. He's a great leader, actually. I'm okay. They're having some problems in OPEC," Trump said, referring to UAE President Sheikh Mohammed bin Zayed Al Nahyan. The UAE on Tuesday announced its exit from OPEC and the broader OPEC+ grouping, marking a significant shift in global oil dynamics. The country, OPEC's third-largest producer, has increasingly pushed for greater production flexibility amid the West Asia crisis and supply disruptions. According to a report by ASK Wealth Advisors, the immediate impact of the UAE's decision on oil prices is uncertain. "The near-term oil price effect is not straightforward and investors should resist simple directional conclusions," the report stated, noting that geopolitical risks and supply constraints - especially following disruptions linked to the Strait of Hormuz - continue to shape the market. The report added that while the move may not instantly reduce prices, it could weaken coordinated supply controls, leading to greater price fluctuations over time. Reduced cohesion within OPEC+ may also erode the "cartel premium," resulting in a broader and more volatile trading range for crude. However, economists have raised concerns about the broader implications of such shifts. Renowned economist Jeffrey Sachs warned that escalating geopolitical tensions and rising crude prices could push the global economy toward crisis. "The world economy will suffer a terrible crisis," Sachs said, cautioning that continued disruptions in oil and gas supplies may trigger widespread instability. He further described the UAE's exit as a "strategic mistake," arguing that coordinated supply management remains crucial during the global transition away from fossil fuels. Sachs noted that crude prices have already surged above USD 100 per barrel and could rise further if tensions persist. (ANI)
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