United Arab Emirates Says It Will Leave Oil Exporting Group
DUBAI, April 28 (Reuters) – The United Arab Emirates announced on Tuesday that it was leaving oil-producing group OPEC as the unprecedented energy crisis triggered by the Iran war exposed discord among Gulf countries.
The loss of the UAE, a long-time OPEC member, could weaken and create turmoil for the group that usually tries to present a united front despite internal disagreements on issues ranging from geopolitics to production quotas.
UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters that the decision was taken after careful consideration of the regional power’s energy strategies.
Asked whether the UAE had consulted Saudi Arabia, the de facto leader of OPEC, he said the UAE had not raised the issue with any other country.
“This is a policy decision and was made after careful consideration of current and future policies regarding the level of production,” the energy minister said.
OPEC Gulf producers are already struggling to export through the Strait of Hormuz, a transit point between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally pass, due to Iranian threats and attacks on ships.
Mazrouei said that the move in which the UAE will also leave the OPEC + group will not have a major impact on the market due to the situation in the strait.
The UAE’s exit from OPEC represents a victory for US President Donald Trump, who accused the organization of “robbing the rest of the world” by inflating oil prices in a speech to the UN General Assembly in 2018.
Trump also linked US military support to the Gulf to oil prices, saying the US was “exploiting this by imposing high oil prices” while defending OPEC members.
The move comes after the UAE, a regional business and financial center and one of Washington’s most important allies, criticized other Arab states for not doing enough to protect them from Iran’s numerous attacks during the war.
Anwar Gargash, diplomatic advisor to the UAE president, criticized the Arab and Gulf response to Iranian attacks during a session at the Gulf Influencers Forum on Monday.
“Gulf Cooperation Council countries have supported each other logistically, but I think their positions politically and militarily are at their weakest historically,” Gargash said.
“I expect this weak stance from the Arab League and I am not surprised by it, but I did not expect this from the (Gulf) Cooperation Council and I am surprised,” he said.
Mazrouei noted that the UAE has been a member of OPEC and OPEC+ for a long time, but said that the world will demand more energy and suggested that his country’s move will help meet these needs.
The UAE’s exit comes as global spare capacity remains at historically low levels, making the oil market increasingly tight.
Operating outside the producer group allows the UAE to fully strengthen its position as a supplier of some of the world’s lowest-cost and lowest-carbon barrels.
Ultimately, the UAE sees its exit from the bloc as a net positive for consumers and the wider global economy, providing a more responsive and reliable energy supply. (Additional reporting by Nayera Abdallah and Yousef Saba; Writing by Michael Georgy; Editing by Aidan Lewis)
