Oil continues to rally despite UAE exit from OPEC

The peace talks between the US and Iran have stalled again. In the absence of any prospect of quickly normalising of freight traffic through the Strait of Hormuz, oil prices continue to rise. The news that the United Arab Emirates is leaving Opec after almost sixty years and plans to boost production also fails to push prices lower. On 17 April, the Brent crude oil price stood at $90.38 per barrel. High, but still the lowest point in six weeks. Since then, the price has risen continuously, to $111.20 at the time of writing (Tuesday afternoon, 28 April), a price increase of 23%. Compared with before the US-Israeli attack on Iraq on 28 February, the price has even risen by 53%. Some of this risk had already been priced in, otherwise the difference would have been even greater. The diesel price has moved more steadily since 23 April and is now at €177.30 per 100 liters for purchases of 4,000 litres (LTO member price). At the pump, diesel is currently (slightly) cheaper than petrol again. The average national recommended retail price for Euro95 according to UnitedConsumers in the Netherlands is €2.560 per liter, while diesel stands at €2.531 per litre. End of the oil cartel? The United Arab Emirates (UAE) will leave Opec and Opec+ as of 1 May, state news agency WAM reports. The country is responsible for about 15% of the cartel’s output and is seen as key for the organization. The country has been a member of Opec since 1967 (until 1971 as the emirate of Abu Dhabi). According to analysts, this departure could well mean the end of Opec. The country wants to operate more independently and pump more oil. During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all. However, the time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets. This is what we will focus on going forward, according to the UAE. After the exit, the country says it will continue to act responsibly by gradually and carefully bringing additional supply to market, in line with demand and market conditions. Normally, the news that the UAE wants to bring more oil to market would have had a downward effect on the oil price. At the moment, however, the country cannot sell additional oil because the Strait of Hormuz is still almost closed. The peace talks between the US and Iran have made no progress. Trump's message on his social media platform, Truth Social this afternoon that Iran is 'in a state of collapse' and has asked the US to open the Strait of Hormuz is apparently not being taken very seriously. In any case, it has not pushed prices lower. Gas prices stable at high levels Just like diesel, the gas price has been hovering around the same level since Thursday 23 April. At the time of writing, that is €44.05 per MWh. That is still 40% more than on 27 February. The spread between the highest and lowest daily average prices on EPEX Spot was wide this week. On Tuesday 14 April, the average price was €132.45 per MWh, while on Sunday 26 April it was €12.95.