The United Arab Emirates has announced its decision to withdraw from both the Organization of the Petroleum Exporting Countries (OPEC) and OPEC+, effective Friday, amidst an unprecedented energy crisis sparked by the Iran conflict that has revealed divisions among Gulf nations.
Having been a longstanding member of OPEC since 1967 through its emirate of Abu Dhabi and later as an independent country since 1971, the U.A.E.’s departure weakens OPEC’s influence over global oil supplies and widens the gap between the U.A.E. and Saudi Arabia, a key figure in OPEC.
The move allows the U.A.E. to potentially boost its oil production once Gulf exports resume, as it will no longer be bound by OPEC production quotas. The decision was communicated through the state-run WAM news agency, emphasizing the country’s long-term strategic vision and commitment to playing a responsible role in global energy markets.
Energy Minister Suhail Mohamed al-Mazrouei confirmed that the decision was made after a thorough assessment of regional energy strategies, clarifying that the U.A.E. did not consult with Saudi Arabia or any other country before making the move.
The strained relationship between the U.A.E. and Saudi Arabia, exacerbated by political and economic disagreements in the Middle East, has led to this decision. The U.A.E.’s exit from OPEC is seen as favorable for U.S. President Donald Trump, who has criticized OPEC for manipulating oil prices.
The U.A.E.’s departure had been speculated due to its objections to OPEC production limits in recent years. With global spare oil capacity at historically low levels, the U.A.E.’s ability to boost production outside of OPEC raises questions about Saudi Arabia’s role as the market’s primary stabilizer.
The withdrawal is not expected to have an immediate impact on oil markets due to ongoing constraints from the Iran conflict. However, in the long run, it could lead to increased oil supply relative to demand once the supply disruptions in the strait are resolved and if the U.A.E. ramps up production.
Energy expert Heather Exner-Pirot noted that this move signifies a changing international order, where multilateral organizations hold less influence, and countries prioritize their own interests. The decision underscores a shift towards a more competitive global landscape in the oil industry.
