Putin Hosts the UAE: OPEC+ and the War in Ukraine
President Al Nahyan’s Recent Visit to Russia:
- On October 11, 2022, United Arab Emirates President Sheikh Mohammed bin Zayed Al Nahyan met with Russian President Vladimir Putin in Saint Petersburg, Russia. In a meeting that was deemed a success by both leaders, Putin emphasized the importance of Russia-UAE relations in achieving global stability and regional order.
- Putin and Al Nahyan agreed to limit oil production in order to stabilize the global energy market.
- Claiming that the agreement’s aim is to balance supply and demand, Putin added that this economic policy decision is not directed at any specific state.
- Al Nahyan expressed that he is looking to find "diplomatic solutions" to the Russia-Ukraine war.
- Beyond oil, Putin promised Al Nahyan that he would remain informed on the situation of the Zaporizhzhia power plant, the largest nuclear power plant in Europe.
Economic Context & the Global Oil Market:
- On October 5, OPEC+ decided to reduce oil production by 2 million barrels a day, the largest cut in supply since the start of the COVID-19 pandemic. Many experts and Western leaders identify this as an effort to help Putin finance his military efforts in Ukraine.
- Experts report that this move is of particular concern for the Biden administration, with rising gas prices “just before the critical midterm US elections.”
- The alliance's decision to cut oil production has further strained the U.S.’s relationship with Saudi Arabia, a key producer in the OPEC+ alliance. President Biden remarked that there will be "consequences" for Saudi Arabia, the largest OPEC oil producer, and the U.S. will reassess its relationship with them.
- The decision for the UAE to join these nations in a cut in oil production is particularly significant due to the country’s high levels of production. The UAE ranks third in OPEC oil production and is a major supplier of oil to Western nations.
- Throughout Russia’s invasion of Ukraine, the UAE has maintained close business ties with Putin, and Al Nahyan has refrained from participating in sanctions against Russia.
- Their strong economic ties are also reflected in the growth of trade between the two nations. Putin stated that trade turnover increased by 65% last year and 17% this year between Russia and the UAE.
- Al Nahyan also stated that 500,000 Russian tourists visit the UAE annually, and 4,000 Russian firms operate in the UAE. Al Nahyan expressed an interest in increasing these numbers, reflecting a desire to maintain strong ties with Russia.