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UAE's OPEC Exit Gives Asia Bargaining Power, Says Economist Sfakianakis

The UAE's exit from OPEC and OPEC+ could give Asian buyers some bargaining leverage, according to economist John Sfakianakis. However, he cautioned that rising demand from Asia and developing countries will limit the extent of such gains. Oil prices are expected to remain elevated due to high global consumption and geopolitical tensions in West Asia. The UAE, OPEC's third-largest producer, seeks greater production flexibility amid supply disruptions.

Key Points: UAE OPEC Exit: Asia Gains Bargaining Power, Says Economist

  • UAE exits OPEC+ grouping
  • Asian buyers gain some bargaining leverage
  • Rising oil demand limits price advantages
  • Geopolitical risks keep oil prices elevated
2 min read

"There will be more supply, bargaining power": Economist Sfakianakis on impact of UAE's OPEC exit on Asian countries

Economist John Sfakianakis says UAE's OPEC exit gives Asian buyers some bargaining leverage, but rising demand limits gains. Geopolitical risks keep oil prices high.

"There will be more supply, no doubt. They will have bargaining power. - John Sfakianakis"

Riyadh, April 30

Chief Economist and Head of Economic Research at the Gulf Research Centre, John Sfakianakis, on Thursday said that the United Arab Emirates' recent exit from the Organisation of the Petroleum Exporting Countries and OPEC+ could give Asian buyers some bargaining leverage, though he cautioned that rising demand may limit the extent of such gains.

Speaking to ANI on the implications of the UAE's exit from the grouping on Asian countries, Sfakianakis said that structural demand growth would continue to constrain pricing advantages for buyers.

The economist further stated that while supply-side changes may increase availability, they are unlikely to significantly shift market dynamics in favour of Asian importers in the short term.

"There will be more supply, no doubt. They will have bargaining power. But again, you will need more oil. The Asian countries will demand more oil. Oil demand is increasing by about a million to a million and a half every year, and it's mainly coming from Asia and other developing countries. So yes, they could have some bargaining power, but that doesn't mean that they have enormous bargaining power only because demand is increasing. You have bargaining power when demand is decreasing, and prices are falling; you can accommodate that by negotiating harder," he stated.

On broader oil market conditions, Sfakianakis said prices are expected to remain elevated in the near to medium term, citing global consumption levels and the need to replenish strategic reserves across major economies.

He added that geopolitical risks, including tensions in West Asia and potential disruptions in maritime routes such as the Strait of Hormuz, continue to play a key role in keeping prices high.

His remarks come after 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.

- ANI

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Reader Comments

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Sarah B
Interesting move by the UAE. As someone watching from Canada, I wonder if this could lead to a restructuring of OPEC itself. But the key point here - demand outpacing supply growth - means we'll still feel the pinch at the pumps. Geopolitical risks in the Gulf are no joke either.
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Aman W
UAE is looking out for their own interests, can't blame them. But for India, this is a mixed bag. More supply means we might get slightly better deals, but rising demand means oil companies will still charge us high prices. The real solution is renewable energy investment - that's where our focus should be.
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Nikhil C
Let's be real - this "bargaining power" talk is just noise. OPEC+ has been manipulating prices for decades, and one member leaving won't change much. The Indian government should focus on strategic oil reserves and long-term contracts, not hope for short-term market shifts.
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Priya S
As a common citizen, all I see is petrol prices never coming down 😔 This expert is saying what we already know - we're at the mercy of global geopolitics and our own growing demand. At least UAE's move might slightly reduce India's vulnerability to supply shocks from Saudi-led cuts. Small step in the right direction.
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Thomas Y
From a Western perspective, this is fascinating. The UAE is clearly frustrated with being constrained by OPEC quotas when they have capacity to produce more. For Asian buyers like India and China, this could create a more fragmented market where they can negotiate separate deals. But demand is the real driver - as long as Asia's economy grows, oil will be in high demand.

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