The United Arab Emirates has said it will leave OPEC and the broader OPEC+ group, dealing a major blow to the oil producing alliances amid a global energy shock.
The defeat of longtime member the UAE threatens to weaken unity within OPEC, which has often hidden internal divisions over geopolitics and production quotas.
Why is UAE leaving OPEC?
A statement from the UAE Ministry of Energy and Infrastructure said the move, effective from May 1, reflects the emirate’s long-term strategic and economic priorities.
“This decision follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our commitment to contribute effectively to our national interest and meeting market needs,” the statement said.
The UAE will continue to act responsibly, she said, adding that “additional production will be brought to the market in a gradual and measured manner in line with demand and market conditions.”
“During our tenure in the organisation, we have made significant contributions and even greater sacrifices for the benefit of all. However, the time has now come for us to focus our efforts on what our national interest dictates.”
The statement said the UAE will remain committed to global market stability.
What does this mean for OPEC?
“The UAE’s withdrawal is a significant change for OPEC,” said George Lyon of energy research company Rystad. “With Saudi Arabia, it [the UAE] is one of the few members with meaningful spare capacity – the mechanism through which the group exerts influence on the market.”
The break underscores a general divergence in the historically strong alliance between the United Arab Emirates and Saudi Arabia, said Ajay Parmar, director of energy and refining at market information service ICIS.
“The UAE has disagreed with general OPEC policy for quite some time. So this is not a surprise, but it will certainly have a significant impact in the long term.”
edited by Srinivas Majumdaru