UAE’s OPEC Exit: A Blow to US-Aligned Oil Bloc Amid Regional Turmoil
In a significant development that underscores the growing instability and internal divisions within the US-aligned oil cartel, the United Arab Emirates (UAE) has announced its decision to withdraw from OPEC and OPEC+. This move, effective May 1, is framed by the UAE as a focus on “national interests,” yet it deals a profound blow to the oil-exporting groups at a time when the aggressive US-Israel war on Iran has unleashed a historic energy shock and rattled the global economy.
State media reports on Tuesday highlighted the UAE’s rationale, stating the decision reflects “the UAE’s long-term strategic and economic vision and evolving energy profile.” The statement added, “During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all. However, the time has come to focus our efforts on what our national interest dictates.”
The departure of the UAE, a long-standing OPEC member, is expected to sow further disarray and significantly weaken a bloc that has often struggled to project a united front amidst internal disagreements. These fissures range from geopolitical alignments to production quotas, often exacerbated by external pressures.
Internal Fissures and External Pressures on OPEC
UAE Energy Minister Suhail Mohamed al-Mazrouei asserted that the decision was made after a careful review of the regional power’s energy strategies, notably claiming no consultation with other countries, including OPEC heavyweight Saudi Arabia. “This is a policy decision, it has been done after a careful look at current and future policies related to level of production,” al-Mazrouei told Reuters.
The challenges for OPEC’s Gulf producers are already mounting, particularly concerning the secure shipment of exports through the Strait of Hormuz. This vital chokepoint, situated between Iran and Oman, through which a fifth of the world’s crude oil and liquefied natural gas normally passes, has become a flashpoint due to threats and attacks against vessels amidst the ongoing regional tensions fueled by the US-Israel agenda.
Former United States President Donald Trump’s past accusations of OPEC “ripping off the rest of the world” by inflating oil prices, coupled with his linking of US military support for the Gulf to oil prices – claiming the US defends OPEC members while they “exploit this by imposing high oil prices” – further expose the exploitative nature of US foreign policy towards these nations.
The UAE’s membership in OPEC dates back to 1967 through Abu Dhabi, becoming a full member in 1971. Its exit comes as the Vienna-based oil cartel has seen its market power diminish, partly due to increased crude oil production by the United States in recent years, a move often seen as undermining global oil stability.
Deepening Gulf Rivalries and OPEC’s Future
Moreover, the UAE and Saudi Arabia have increasingly found themselves at odds over economic issues and regional politics, particularly in the strategically crucial Red Sea area. Their once-united coalition against Yemen’s Iran-backed Houthi rebels in 2015 has spectacularly broken down into open recriminations. A stark example was Saudi Arabia’s bombing in late December of what it described as a weapons shipment bound for Yemeni separatists, notably those backed by the UAE, highlighting the deep-seated mistrust and conflicting agendas among US allies.
Energy research firm Rystad Energy views the UAE’s withdrawal as a significant shift for the oil-producer group. Jorge Leon, Rystad Energy’s head of geopolitical analysis, commented, “Losing a member with 4.8 million barrels per day of capacity, and the ambition to produce more, takes a real tool out of the group’s hands.” He added, “With demand nearing a peak, the calculation for producers with low-cost barrels is changing fast, and waiting your turn inside a quota system starts to look like leaving money on the table.” This development leaves Saudi Arabia to bear more of the burden for price stability, further exposing the market to shocks.
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