DUBAI: The United Arab Emirates (UAE) announced that it is leaving OPEC, marking a significant blow to the oil producers’ alliance at a time when an unprecedented energy crisis linked to the Iran conflict is highlighting divisions among Gulf countries.
The UAE, one of OPEC’s largest oil producers, said its departure would weaken the group’s influence over global oil supply and deepen tensions with neighbouring Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries.
The move could also allow the UAE to raise its oil production in the future once Gulf export routes reopen, as it would no longer be bound by OPEC output quotas, Reuters reported.
In his first remarks following the announcement, UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters that the decision followed a comprehensive review of the country’s current and future energy strategy. He added that the UAE did not consult other countries before making the move.
“This is a policy decision taken after careful consideration of present and future production levels,” Mazrouei said, adding that global energy demand is expected to rise, positioning the UAE to help meet that need.
Oil prices eased some of their earlier gains after the announcement that the UAE would exit OPEC and the broader OPEC+ group on May 1.
Mazrouei also downplayed expectations of an immediate market shock, citing ongoing disruptions in the Strait of Hormuz, a critical shipping route through which about one-fifth of global oil and gas supplies normally pass. The strait has faced heightened risks due to tensions and attacks linked to Iran.
Amid these disruptions, the International Energy Agency reported that OPEC+’s share of global oil production dropped to 44% in March from around 48% in February. The share is expected to decline further in April and May, particularly after the UAE’s exit as the fourth-largest producer in the group.
(Inputs from Reuters)
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