How the UAE’s decision to leave Opec could recast the Middle East | Opec

The United Arab Emirates’ decision to leave OPEC is a political as well as a commercial decision and will reignite the growing disputes between the UAE and Saudi Arabia, which have been glossed over by their shared anger with Iran over its attacks on Gulf states since the start of the US-Israeli war on Tehran.

In the short term, leaving the oil-producing cartel it joined in 1967 gives the UAE the freedom to respond quickly to the long-term prospect of tight supplies and maximize profits. However, since the tensions between the UAE and Saudi Arabia over production quotas have been ongoing for a long time, this is a decision that the UAE has previously considered.

But the timing and unilateral nature of the UAE decision illustrate how other intra-Gulf disputes over how to respond to the Iran war could reshape the Middle East.

The departure is, of course, a blow to Saudi Arabia’s prestige. Because it positions the UAE as the Gulf country closest to Donald Trump, a long-time critic of OPEC, and weakens the Saudis’ ability to manage the price of oil.

The announcement came without any prior consultation, as the six-member Gulf Cooperation Council (GCC), which includes Saudi Arabia and the UAE, met in an emergency session in Jeddah for the first time since the Iranian attacks.

Since the start of the conflict with Iran, the UAE, the Gulf state politically closest to Israel and most hostile to Tehran, has been privately pushing Saudi Arabia and Qatar to launch a joint counter-offensive against Iran. Partly as a result of its geographical proximity, the UAE became the Gulf state most heavily attacked by Iran, fending off more than 2,200 drones and missiles.

Despite briefings that Saudi Arabia called on the United States to defeat Iran, there was no public consensus in the Gulf Cooperation Council to take a potentially risky step that could be interpreted not only as self-defense but also as siding with Israel.

Unable to provide the political solidarity it demanded, the UAE decided to abandon the economic solidarity of the oil producers’ club and continue on its own. State-run Adnoc says it can increase production to 5 million barrels a day by 2027, from 3.4 million barrels a day before the start of the Iran war.

Following the closure of the Strait of Hormuz, the country’s production fell 44% to 1.9 million in March, and the ability to increase production is being debated.

Overall, the Iran war wiped out 7.88 million barrels per day of OPEC production in March, which dropped 27% to 20.79 million barrels for the same month; This was the biggest supply collapse for the producer group in decades.

Dr Ebtesam Al-Ketbi, chairman of the Dubai-based Emirates Policy Centre, described the decision as an act of self-interest. “In effect, the UAE is redefining its role from a producer within a bloc to a balancing producer contributing to market stability through its ability to act.” he said.

“While this move could gradually weaken OPEC’s alignment, it also strengthens the UAE’s position as an actor that can directly influence global supply dynamics.”

Determined to diversify, the UAE has become far more dependent on US goodwill than Saudi Arabia. A decision to leave OPEC could indeed cement the country as Trump’s diplomatic favorite, which could have investment implications for the emirates.

The UAE is already using its influence. Earlier this month, in a sign of his displeasure with Pakistan’s neutrality on Iran, he recalled $3.5 billion in deposits from Pakistan, a fifth of Pakistan’s foreign exchange reserves, and forced Saudi Arabia to step in to help Pakistan.

At the same time, the UAE was pursuing a largely commercially focused foreign policy that pitted it directly against Riyadh in the Horn of Africa. Depending on how the Saudis react, these tensions could resurface.

Diplomatic advisor to the UAE president, Dr. Anwar Gargash has repeatedly voiced warnings about the UAE’s disappointment with the Gulf’s collective political response to Iran’s “pre-planned attack”.

On Monday, Gargash said the Gulf Cooperation Council, the political bloc comprising the UAE, Saudi Arabia, Oman, Qatar, Bahrain and Kuwait, was at its lowest ebb. “Unfortunately, given the nature of the attack and the threat it poses to everyone, the Gulf Cooperation Council’s position is the weakest in history.”

Hinting at antagonism to Turkey and possibly Pakistan, he said: “We cannot allow anyone outside the Gulf region to dictate our security priorities. These missiles will not be aimed at them tomorrow; they will be aimed at us.”

“Therefore, there must be a Gulf vision, policy and representation at the national level, and hopefully also valid at the collective level. National defense is very important, but we must also say that Gulf solidarity is not up to the task.”

Before the debate on the future of the US security guarantee in the Gulf countries, Gargash revealed his stance by arguing that Iran, not Israel, remains the major strategic threat and that America is still needed in the region.

“Today, America’s role in the region has become more important, not less, because America’s role is not just about military installations or things like that. America’s role is a defense system. America’s role is political support. America’s role is economic and financial participation.”

By leaving OPEC, the UAE will hope to secure US participation.