Abu Dhabi, United Arab Emirates. The United Arab Emirates said on Tuesday it was quitting OPEC, a move that weakens the group’s influence over global oil supplies as an energy crisis linked to the Iran war exposes discord among Gulf nations.
Impact on OPEC and regional ties
The exit of the UAE, one of OPEC’s biggest producers, reduces OPEC’s control over global oil supplies and widens a rift between the UAE and Saudi Arabia, which is effectively the leader of the Organization of the Petroleum Exporting Countries.
The move could also free the UAE to increase output once exports via the Gulf resume, as it would no longer be governed by OPEC quotas.
Minister cites policy review
In his first public comments since the announcement, UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters in a telephone interview that the decision was taken after examining the country’s energy strategies.
He said the UAE had not discussed the issue with any other country.
“This is a policy decision, it has been done after a careful look at current and future policies related to level of production,” Mazrouei said.
He also said the world would demand more energy, implying the UAE would be positioned to meet that need.
Market reaction and shipping constraints
Oil prices on international markets trimmed gains on Tuesday following the UAE’s announcement that it would on May 1 leave OPEC and OPEC+, which brings together OPEC and allied producers.
Mazrouei said he did not expect much immediate market impact from the news because of constraints in the Strait of Hormuz.
OPEC Gulf producers have been struggling to ship exports through the Strait, a chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, because of Iranian threats and attacks against vessels.
How do you think the UAE’s departure from OPEC could affect global oil supplies in the coming months?
