President Yoon Suk Yeol and President of the United Arab Emirates (UAE) Sheikh Mohamed bin Zayed Al Nahyan shake hands during a Korea-UAE summit at the Yongsan Presidential Office in Seoul on May 29, 2024. [Photo: Yonhap News]

American political commentator Gene Cummings has newly analyzed the significance of the Comprehensive Economic Partnership (CEP) Agreement between Korea and the UAE, signed during President Yoon Suk Yeol's term.

Cummings reiterated on the 3rd via Facebook that the Korea-UAE CEPA, officially signed in Seoul on May 29, 2024, during President Yoon's tenure, officially took effect on May 1, 2026, marking it as Korea's first comprehensive economic partnership agreement with an Arab nation in the Middle East. 

Consequently, tariffs on 91.2% of all goods will be reduced or eliminated, and trade between the two countries is expected to double, with direct promotional effects anticipated across energy, industry, and supply chains. 

He added, “This signifies the opening of a new structural trade corridor between the Gulf region and Asia, going beyond a mere bilateral trade agreement.”

Cummings pointed out that the current Middle East energy crisis is not solely about crude oil prices but is a confluence of events revealing: △ the weakening of oil-producing cartels △ the blockade of maritime routes △ U.S. military and economic pressure on Iran △ the realignment of interests among Middle Eastern oil producers, and △ the structural vulnerability of the Korean economy that must absorb all these shocks.

Korea has long depended on Middle Eastern crude oil. However, because the import, refining, petrochemical production, and distribution of jet fuel, diesel, and gasoline operate smoothly and often unnoticed, the public is unaware that the entire Korean economy is virtually anchored to the Middle Eastern maritime transportation routes.

Cummings highlighted that this unseen reality becomes apparent the moment the Strait of Hormuz is blocked. What is crucial here is the fissure that has occurred within the oil-producing order, related to the UAE's withdrawal from OPEC.

Cummings stated, “In the midst of these changes, the CEPA, which may seem like a simple trade agreement in normal times, becomes a crucial agreement that acts as a supply chain safety net during times of war, blockade, and energy crisis. This is because during a crisis, it's not just about buying oil cheaply, but about having an institutional channel to trade stably with specific oil-producing countries,” thus commending President Yoon Suk Yeol's diplomatic achievement.

He expressed regret that the media is remaining silent on the diplomatic foundation laid by President Yoon, despite it being the truth.

He further predicted, “Korea must now view crude oil not as a mere import, but as a strategic asset combined with diplomacy, military, finance, and industry. In that sense, the coincidence of the UAE's withdrawal from OPEC and the Korea-UAE CEPA coming into effect at the same time holds a symbolism beyond mere chance.” 

The following is the full text of Gene Cummings' Facebook post. 

On May 29, 2024, during President Yoon Suk Yeol's term, Korea and the UAE officially signed the Comprehensive Economic Partnership Agreement, or CEPA. On the day President Yoon Suk Yeol and UAE President Sheikh Mohamed bin Zayed Al Nahyan held a summit in Seoul, ministers from both countries officially signed the agreement. 

This was Korea's first comprehensive economic partnership agreement with an Arab nation in the Middle East. Following ratification procedures by both countries, the agreement officially took effect on May 1, 2026. 

Tariffs on 91.2% of All Goods Reduced or Eliminated

As a result, tariffs on 91.2% of all goods will be reduced or eliminated, and trade between the two countries is expected to double. Furthermore, direct promotional effects are anticipated across energy, industry, and supply chains. This signifies the opening of a new structural trade corridor between the Gulf region and Asia, going beyond a mere bilateral trade agreement.

President Yoon Suk Yeol speaks during a Korea-UAE summit with UAE President Sheikh Mohamed bin Zayed Al Nahyan at the Yongsan Presidential Office in Seoul on May 29, 2024. Yonhap News

The current Middle East energy crisis is not merely a matter of rising international oil prices. It is a situation where the weakening of oil-producing cartels, the blockade of maritime routes for oil transport, U.S. military and economic pressure on Iran, the realignment of interests among Middle Eastern oil producers, and the structural vulnerability of the Korean economy that must absorb all these shocks are being revealed simultaneously.

Korea has long depended on Middle Eastern crude oil. However, this dependency structure is not readily apparent in normal times. Crude oil arrives, refineries process it, petrochemical plants receive naphtha to produce products, airlines use jet fuel, logistics companies use diesel, and consumers refuel at gas stations. Because everything operates smoothly and seamlessly in the background, the public lives unaware that the entire Korean economy is virtually resting upon the maritime transportation routes of the Middle East.

However, when the Strait of Hormuz is blocked, as seen in recent events, this unseen reality has come to light.

This narrow strait, Hormuz, is the main artery of Korean industry, through which a significant portion of Korea's imported crude oil and naphtha passes. The Korean government stated that, as of last year, 61% of Korea's crude oil imports and 54% of its naphtha imports passed through Hormuz.

The Korean government announced that it secured 273 million barrels of crude oil and 2.1 million tons of naphtha to bypass Hormuz amidst this crisis. These figures directly expose Korea's vulnerability.

Estimating Korea's daily crude oil consumption at approximately 2.7 to 3 million barrels, 273 million barrels roughly corresponds to about three months of crude oil demand. The 2.1 million tons of naphtha is also sufficient for the Korean petrochemical industry to operate for about a month.

Under normal circumstances, these quantities are absorbed and remain unseen within the natural flow of market procurement. However, with Hormuz blocked, the government had to immediately secure a three-month supply of crude oil and a one-month supply of naphtha separately. This illustrates just how thin the energy supply line supporting the Korean economy is.

The fact that the government hastily arranged such a volume of bypass supply itself indicates the structural instability of Korea's energy security, as even a few weeks of disruption in crude oil and naphtha supply would put simultaneous pressure on refining, petrochemicals, logistics, exports, and prices.

If Hormuz is blocked, Korea's economy is shaken not only in terms of gasoline prices at the pump but also in refining, petrochemicals, aviation, shipping, logistics, power generation, plastics, synthetic fibers, automotive parts, electronic component materials, packaging, food prices, exchange rates, inflation, and interest rates.

As crude oil prices rise, refining costs increase. If naphtha becomes scarce, petrochemical plant profitability plummets, and as petrochemical product prices rise, overall manufacturing costs increase. Ultimately, a single strait in the Middle East can shake the prices of Korean consumers' shopping baskets and the export competitiveness of businesses.

Noticeable Structural Weakening of OPEC 

The attached graph clearly shows the significant decline in OPEC's crude oil production over the past decade.

In 2013, OPEC's production was 30.48 million barrels per day. It peaked in 2016 at 33.19 million barrels per day. However, the trend completely changed thereafter.

Production dropped to 29.85 million barrels in 2019 and plummeted to 25.66 million barrels in 2020 during the COVID-19 shock. Although it partially recovered to 26.41 million barrels in 2021 and 28.84 million barrels in 2022, it weakened again to 28.15 million barrels in 2023 and 26.52 million barrels in 2024, with 2025 projected at only 27.75 million barrels.

These figures indicate not merely the result of economic fluctuations but the structural weakening of the cartel itself, OPEC.

Due to member country withdrawals, prolonged production cuts, imbalances in production capacity, dissatisfaction with the Saudi-centric order, the rise of U.S. shale oil, the expansion of non-OPEC oil-producing countries, and individual countries' energy security strategies, OPEC can no longer unilaterally control the global oil market as it once did.

As the graph title suggests, with member countries leaving and production cuts continuing, OPEC's production has significantly decreased over the past decade. This signifies that the long-standing order of the oil market is being shaken.

In the past, OPEC's production cut decisions caused market tension, and its decisions to increase production brought market relief. However, this is no longer the case.

OPEC's production volume itself has decreased, member countries' interests are diverging, and some oil producers no longer wish to be bound by the Saudi-centric quota system. Simultaneously, with the growth of non-OPEC supply hubs like U.S. shale, Brazil, Guyana, Canada, and Kazakhstan, the oil market is transforming into a structure where a single cartel can no longer completely dominate.

What the UAE's Withdrawal from OPEC Signifies 

Amidst these trends, the UAE has withdrawn from OPEC. The UAE announced its withdrawal from OPEC on April 28, 2026, and ceased to be a member of OPEC and OPEC+ from May 1. (Note: The text states 2026 here, which is likely a typo and should refer to a past event. Assuming it meant a date prior to the agreement's effect in 2026 based on context).

The UAE had been steadily expanding its production capacity, but it was unable to increase production freely due to OPEC quotas, which had been a long-standing source of dissatisfaction for the UAE.

While the UAE is not a country holding symbolic hegemony in the Middle Eastern oil-producing order like Saudi Arabia, it is actually one of the few key oil producers with spare production capacity. The UAE's withdrawal from OPEC is not merely the departure of one member; it is evidence of a fissure within the oil-producing order.

Strategic Significance of the Korea-UAE CEPA

As Korea is not an oil-producing country, it thrives by importing crude oil, refining it, processing it, and converting it into industrial products. Therefore, Korea's focus should not be solely on whether crude oil prices are cheap or expensive.

It must consider the diversification of supply sources, the stability of long-term contracts, the security of maritime transportation routes, and the diplomatic relationships that allow for preferential supply from specific oil-producing countries during a crisis. It is precisely at this point that the CEPA with the UAE holds strategic significance.

The CEPA with the UAE, the Comprehensive Economic Partnership Agreement, is essentially a free trade agreement with a broader scope of cooperation than an FTA. It establishes an institutional framework for cooperation that encompasses energy, investment, supply chains, and industrial collaboration, going beyond simply reducing tariffs on goods.

The CEPA between Korea and the UAE took effect on May 1, 2026. This agreement, Korea's first free trade agreement with an Arab nation in the Middle East, includes provisions for the phased elimination of tariffs on most items, including crude oil.

Under this agreement, the 3% tariff on UAE crude oil will be phased out over 10 years. While 3% may seem small at first glance, it is by no means a minor burden for a country like Korea that imports crude oil in tens and hundreds of millions of barrels.

For example, if $10 billion worth of crude oil is imported, the 3% tariff alone amounts to $300 million. This cost ultimately becomes part of the refiner's costs, and refiners face even greater burdens in the process of refining that crude oil to produce gasoline, diesel, jet fuel, bunker fuel, and petrochemical feedstocks.

The phased elimination of tariffs over 10 years is a significant benefit for Korea. A reduction in crude oil import costs eases the burden on refiners, which can ultimately lead to a reduction in industrial costs and inflationary pressures.

In this regard, the CEPA, while appearing as a mere trade agreement in normal times, becomes a crucial agreement that serves as a supply chain safety net during times of war, blockade, and energy crisis. This is because during a crisis, it is not just about buying oil cheaply, but about having an institutional channel to trade stably with specific oil-producing countries.

During a crisis, "who can I contact first?" is extremely important. When war breaks out, the international oil market becomes volatile, and all countries compete simultaneously to secure supplies, rushing to secure ships, insurance, and alternative routes. At such times, countries that have established institutional relationships in advance gain a significant advantage in negotiations over those that have not.

Indeed, Korea had a diplomatic and strategic channel for immediate consultation with the UAE following the recent Hormuz incident.

While the CEPA took effect on May 1, the tariff benefits and institutional effects stipulated in the agreement were not necessarily applied before that date. However, what is important is not just the effective date, but the fact that a strategic relationship based on cooperation in energy, investment, and supply chains had already been established between Korea and the UAE since the signing of the CEPA in May 2024.

In times of crisis, the speed at which this relationship can be translated into actual securing of supplies is crucial. Ultimately, the Lee Jae-myung administration belatedly secured 24 million barrels of crude oil from the UAE and arranged an additional 273 million barrels of crude oil supply to bypass Hormuz through Saudi Arabia, Kazakhstan, and Oman.

Under normal circumstances, this volume corresponds to more than three months of Korea's crude oil demand and about one month of naphtha demand.

President Yoon Suk Yeol's Strategic Diplomatic Asset Revealed Amidst Crisis

This is a crucial point. Had President Yoon Suk Yeol not signed the CEPA with the UAE in May 2024, it would have been significantly more difficult for Korea to consult and secure crude oil supplies from the UAE during the recent Iran-Hormuz incident.

The CEPA was not merely a tariff reduction agreement but a strategic diplomatic asset that institutionalized cooperation in energy, investment, and supply chains. The Lee Jae-myung administration is now utilizing that asset. Yet, the media makes no mention of the diplomatic foundation that President Yoon Suk Yeol preemptively established.

What Korea needs to consider more deeply here is not just the issue of securing crude oil but the structure that allows for actual supply acquisition during a crisis. While price competitiveness is important in normal times, during war and blockade, volume becomes more important than price, and routes become more important than volume, and diplomatic priority becomes more important than routes.

Even with a contract, crude oil will not arrive if ships cannot move. Even with money, ships will not depart if maritime insurance is blocked. Even with oil-producing countries, if political relationships and institutional channels are weak, they may be pushed back in the queue during a crisis. The recent Hormuz incident demonstrated this harsh reality.

In this regard, the UAE is not simply a crude oil supplier. The UAE is a country that, by leaving OPEC, has opted out of the Saudi-centric quota system and is pursuing its own independent energy strategy. Concurrently, it is expanding its national strategy to include nuclear power, defense industry, ports, logistics, finance, AI, advanced manufacturing, and space industries. It is transitioning from an oil exporter to a platform country for investment and industry in the Middle East.

The interests of Korea and the UAE align precisely here. As the UAE prepares for a post-oil era, it needs partners in manufacturing, nuclear power, defense, and advanced industries. Korea needs a stable energy supply line and a strategic base within the Middle East. Korea possesses capabilities in refining, petrochemicals, shipbuilding, nuclear power, construction, defense, semiconductors, and batteries. The UAE possesses capital, energy, ports, and a network in the Middle East. The cooperation between the two countries is bound to go beyond simple crude oil trade.

Therefore, Korea should not limit its relationship with the UAE to crude oil imports and tariff reductions. It must be bundled into a strategic package encompassing long-term crude oil supply contracts, joint stockpiling, alternative transportation routes, joint investments in refining and petrochemicals, port and logistics infrastructure, nuclear power plant operation, defense industry cooperation, and energy finance. This is the energy security strategy Korea must pursue going forward.

U.S. Military and Economic Pressure Shakes Iran

U.S. pressure on Iran must also be viewed within this framework. What is important is not U.S. domestic politics or debates over war powers, but the fact that U.S. military and economic pressure is simultaneously shaking Iran's oil exports and the stability of the Strait of Hormuz. When maritime blockades, financial sanctions, and oil export disruptions are combined, Iran's foreign exchange earnings and regime finances come under pressure, and the impact immediately spreads to the international oil market and Asian importers.

Iran can pressure the world by threatening the Strait of Hormuz. However, that blade also turns on Iran itself. Oil is money only when it is sold, money when it is shipped, and money when it is paid for. If exports are blocked, storage facilities fill up, forcing production cuts. Prolonged production cuts lead to well closures, or "shut-in" problems. Ultimately, the Hormuz crisis creates pressure simultaneously on Iran, the Gulf oil producers, and energy importers like Korea.

Therefore, Korea should not view this incident as "someone else's war happening in the Middle East." All these changes—the U.S. militarily and economically pressuring Iran, Iran restricting passage through Hormuz, the U.S. responding with maritime blockades, the UAE withdrawing from OPEC, and OPEC's cohesion weakening—are directly linked to Korea's energy supply chain.

While Korea's economy is geographically distant from the Middle East, industrially it is already anchored to that strait.

The conclusion of this crisis is clear. Korea must re-strategize its Middle East energy policy going forward. It must manage supply sources such as Saudi Arabia, the UAE, Oman, and Kazakhstan in a multi-layered manner, secure alternative transportation routes that are not dependent on the Strait of Hormuz, and re-examine strategic stockpiling, private inventory, long-term contracts, and joint investment structures.

What the Korean media should do now is explain this. It should not stop at superficial reporting like "oil prices are rising," "the government has secured crude oil," or "cooperation with the UAE."

It must explain why Korea had to hastily secure three months of crude oil and one month of naphtha, why the CEPA with the UAE holds strategic significance now, why the UAE's withdrawal from OPEC presents both an opportunity and a risk for Korea, and why diplomatic assets created by the previous administration are being used for the current government's crisis response.

In energy security, the most dangerous country is not the one without oil. Rather, the most dangerous country is the one that does not know where its oil comes from, what sea routes it travels, who can block those routes, and who can open them.

Korea must now view crude oil not as a mere import but as a strategic asset combined with diplomacy, military, finance, and industry. In that sense, the coincidence of the UAE's withdrawal from OPEC and the Korea-UAE CEPA taking effect at the same time holds a symbolism beyond mere chance. 

At the moment the long-standing order of OPEC is shaken, Korea has opened the door to institutional cooperation with new energy partners in the Middle East. While it is uncertain now, it is precisely within this uncertainty that the value of President Yoon Suk Yeol's preemptive diplomacy is being revealed.

There are not a few countries that produce crude oil. However, there are few countries that can actually dispatch ships to Korea during a crisis. Therefore, energy security is not simply a matter of purchasing power but of diplomacy, sea routes, and supply chains.

For a country like Korea with almost no energy resources, taking diplomacy lightly is a fatal delusion. Even a leader with strong domestic political support will see their nation's industrial and security foundations shaken the moment they disregard diplomacy.

If power is cut off for even a single day in a megacity like Seoul, the economy and security will be paralyzed. For Korea, which relies on external energy sources to operate its nation, diplomacy is not a matter of face or pride. For Korea, diplomacy is a matter of survival.

Image: MEES (Middle East Economic Survey) 

The UAE withdrew from OPEC on May 1, ending its 59-year membership. It also withdrew from the broader OPEC+ alliance, which will mark its 10th anniversary of a "Cooperation Declaration" in December. The UAE's departure is considered the biggest blow to OPEC's 66-year history and carries far more significant implications than the recent withdrawals of Qatar, Ecuador, and Angola.

The UAE was OPEC's third-largest oil producer, with a pre-war production of 3.4 million barrels per day, significantly more than the combined production of the previously departed Qatar, Ecuador, and Angola.

◆ Gene Cummings 

Gene Cummings is an American political columnist. After working at Baltimore's Channel 13, he served as Editor-in-Chief of the Sunday Times (1994-1996) and Business Director of The Korean Weekly (1996-2000) before founding The Asia Post. He currently works as a back-end analyst in politics, diplomacy, and security for a private company conducting government contracts.