Anthony Albanese has backed the United Arab Emirates’ “sovereign” decision to leave a cartel of major oil-producing countries, in remarks praising the “very positive relationship” between Australia and the wealthy Gulf state.
Formed in the 1960s to challenge Western oil companies’ global dominance, the Organisation of the Petroleum Exporting Countries (OPEC) is made up of 12 countries and controls up to 80 per cent of the world’s proven oil reserves.
The member with the smallest reserves is Equatorial Guinea at 1.1 billion barrels.
Venezuela boasts the group’s biggest reserves with north of 303 billion barrels.
The UAE’s government said overnight it would leave OPEC effective May 1 and that its “decision reflects the UAE’s long-term strategic and economic vision”, including boosting global oil production.
Asked about the move on Wednesday, the Prime Minister was keen to spruik Australia’s economic, defence and links with the country.
“The UAE is a sovereign country,” Mr Albanese told reporters.
“We have a very positive relationship with them. We have a free-trade agreement with them.”
He went on to say the neither Canberra nor Abu Dhabi were “protagonists” in the US and Israeli war with Iran, but that Australia had “provided defensive support for the UAE”.
“We have over 20,000 Australians based in the UAE, in Dubai and Abu Dhabi, and so we have a very direct interest as well as having support for our friends,” Mr Albanese said.
“(Sheik Mohamed bin Zayed) I regard as being a friend of Australia and that relationship is of mutual benefit for us.”
By leaving OPEC, the UAE will not be restricted by the group’s production limits, which are designed to keep global oil prices high.
This could let it flood the international market with crude, undermining OPEC’s ability to fix prices and give it funds to pump into artificial intelligence and renewable energy.
“This decision follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs,” the Emirati government said in its statement.
“While near-term volatility, including disruptions in the Arabian Gulf and the Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand over the medium to long term.
“A stable global energy system depends on flexible, reliable, and affordable supply.
“The UAE has invested to meet evolving demand efficiently and responsibly, prioritising stability, affordability, and sustainability.”
