Does The News From UAE Imply Trouble For OPEC?

Does The News From UAE Imply Trouble For OPEC?

UAE's Minister of Energy and Industry Suhail al-Mazrouei speaks during the Future Sustainability ... [+] Summit at Abu Dhabi National Exhibition Centre (ADNEC) on January 14, 2020. (Photo by KARIM SAHIB / AFP) (Photo by KARIM SAHIB/AFP via Getty Images)



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News out of Abu Dhabi has made some think that cracks might be showing in the OPEC+ edifice, including rumors that the Emirate was planning to leave OPEC, but also announcement of discovery of 22 billion barrels of added oil reserves. That new oil would, by itself, place twelfth on the list of global oil reserves and represents more oil than has been added to global reserves in a given year for decades.

Except: most of the oil (20 billion barrels) was unconventional, specifically shale oil, and while a significant amount, it would presumably require more effort than the existing conventional oil production. The rest, which ADNOC described as “an increase in conventional oil reserves” presumably represents an upward revision of existing reserves rather than an actual discovery of new fields, as many media reports imply. 

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