The United Arab Emirates has announced its decision to depart from both the Organization of the Petroleum Exporting Countries (OPEC) and OPEC+. This move, effective Friday, comes amidst an unparalleled energy crisis triggered by the Iran conflict, revealing internal discord among Gulf nations.
Having been a member of OPEC since 1967 through its emirate of Abu Dhabi and later as an independent country in 1971, the U.A.E.’s exit weakens OPEC’s influence over global oil supplies. The rift between the U.A.E. and Saudi Arabia, OPEC’s predominant member, is further widened by this decision, as the U.A.E. is among the group’s major oil producers.
With nearly 40% of the world’s oil output controlled by OPEC, the organization has faced diminishing market power in recent times, especially with increased oil production by the United States. The U.A.E.’s departure could potentially allow it to boost production independently, no longer restrained by OPEC quotas.
The announcement was made through the U.A.E.’s state-run WAM news agency, citing the country’s long-term strategic vision, economic goals, and commitment to global energy markets. Energy Minister Suhail Mohamed al-Mazrouei emphasized that the decision was made after careful consideration of regional energy strategies and policies.
The U.A.E.’s strained relationship with Saudi Arabia, exacerbated by political and economic differences, has been a contributing factor to this move. The ongoing challenges faced by OPEC Gulf producers in shipping exports through the Strait of Hormuz due to Iranian threats have also influenced the U.A.E.’s decision.
This departure aligns with U.S. President Donald Trump’s criticism of OPEC for maintaining high oil prices, positioning it as a victory for the U.S. The U.A.E.’s stance reflects its dissatisfaction with the support received from fellow Arab states during the conflict with Iran.
Analysts highlight the U.A.E.’s significance in the oil market, given its spare production capacity, which could impact Saudi Arabia’s role as the market stabilizer. While the immediate market impact is expected to be minimal due to ongoing supply constraints, the long-term implications of the U.A.E.’s withdrawal remain uncertain.
Heather Exner-Pirot, an energy expert, views this move as indicative of a changing geopolitical landscape, emphasizing a shift towards individual interests over multilateral alliances in the global oil market.