
© UnknownOPEC quake!
Lookie here...The United Arab Emirates recently announced
it would quit OPEC after nearly six decades, striking a major blow to the oil cartel and to Saudi Arabia, its unofficial leader.
Let's be clear, the UAE didn't leave OPEC. They were bought out. You may recall that this event was preceded by two major developments that tell the actual story. The first was the shutting of the Strait of Hormuz (SoH). This bled UAE finances and continues to do so. It creates not only a loss of revenue but
a shortage of dollars with oil being sold for dollars. This is why the
US provided the UAE with dollar swap lines.The UAE is also highly dependent on the US military not abandoning them. They already realise that has happened to some degree, but looking around their neighborhood they realise
they have no friends and so cling to whatever is left of US security promises.
The market immediately saw this as a step towards more production, since the UAE would no longer be constrained by OPEC's agreed quotas, but the reality is that
productive capacity has been destroyed (refineries bombed, wells capped).
What's important to think about is that
swap lines are nothing more than a credit card, and debt is the ultimate tool of slavery.
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