United Arab Emirates quits OPEC in blow to oil cartel
The United Arab Emirates announced it was leaving oil producers’ group OPEC as an unprecedented energy crisis triggered by the Iran war revealed discord among Gulf countries.
The loss of the UAE, a long-time OPEC member, could create turmoil and weaken the group, which often seeks to show a “united front” despite internal disagreements on issues ranging from geopolitics to production quotas.
The decision was “taken after careful consideration of the regional power’s energy strategies,” UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters.
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.
The country will withdraw from the Organization of Petroleum Exporting Countries as of May 1, state news agency WAM said on Tuesday.
It has been rumored for some time that the UAE’s decision was a possibility, as OPEC in recent years has pushed back against production quotas it deemed too low; This meant that it could not sell as much oil to the world as it wanted.
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 leave the OPEC + group will not have a big impact on the market due to the situation in the Bosphorus.
The UAE’s departure from OPEC is likely to be welcomed by US President Donald Trump, who accused the organization of “rip off the rest of the world” by inflating oil prices in his speech to the United Nations 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 the United States’ most important allies, criticized 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.
“The Gulf Cooperation Council countries have supported each other logistically but also politically and militarily, I think their position is the 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 it 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.
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.
With DPA and AP
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