Rohit Kumar
NEW DELHI, Apr 28: Dealing a lethal blow to the group of the major oil producing countries, the United Arab Emirates on Tuesday announced its decision to quit Organization of the Petroleum Exporting Countries (OPEC) and OPEC+ effective from May 1, a move long anticipated as the country grew increasingly frustrated with production limits and its strained ties with neighboring Saudi Arabia.
The decision could deliver a heavy blow to the oil exporting groups and their de facto leader, Saudi Arabia, at a time when the Iran war has caused a historic energy shock and unsettled the global economy.
But it may represent a big win for US President Donald Trump, who has accused the organization of “ripping off the rest of the world” by inflating oil prices. Mr Trump has also linked US military support for the Gulf with oil prices, saying that while the US defends OPEC members they “exploit this by imposing high oil prices”.
The stunning loss of the UAE, a longstanding OPEC member contributing about 15 per cent of the total oil exports of the group, could create disarray and weaken the group, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.
The announcement comes at a time when the ongoing conflict involving the United States, Israel and Iran has already triggered a massive energy shock which has pushed global markets into deeper uncertainty. The UAE made the announcement via its state-run WAM news agency. “This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets,” the UAE said.
It also comes as the UAE has increasingly come into conflict with Saudi Arabia, particularly over economic issues and the war in Yemen against the Iran-backed Houthi rebels. The UAE, one of the most influential and long-associated members of OPEC, has traditionally played a key role in shaping the bloc’s strategies. Its sudden departure is being seen as a major setback for the group, especially at a moment when the global economy is reeling from severe supply disruptions and volatility.
OPEC Gulf producers have already been struggling to ship exports through the Strait of Hormuz, a narrow chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, because of Iranian threats and attacks against vessels.
The move came after the UAE, a regional business hub and one of Washington’s most important allies, criticized fellow Arab states for not doing enough to protect it from numerous Iranian attacks during the war. Anwar Gargash, the diplomatic adviser for the UAE President, criticized the Arab and Gulf response to the Iranian attacks in a session at the Gulf Influencers Forum on Monday.
“The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically,” Mr Gargash had said. “I expect this weak stance from the Arab League and I am not surprised by it, but I haven’t expected it from the (Gulf) Cooperation Council and I am surprised by it,” he said.
As per reports, the departure of the UAE is likely to unsettle the group and weaken its collective strength. The bloc, which has historically projected unity despite differences over geopolitical issues and production limits, now faces the risk of growing internal strain. At the same time, Gulf producers within OPEC are grappling with serious logistical challenges. Oil shipments through the Strait of Hormuz, a critical global transit route between Iran and Oman that carries nearly one-fifth of the world’s crude and LNG supplies, have been disrupted due to Iranian threats and attacks on vessels.
The UAE energy minister said stepping away from the group would give the country greater flexibility, as it would no longer be bound by collective obligations. The departure follows years of friction with Saudi Arabia over oil production policy as well as broader regional influence.
The two countries have clashed at OPEC meetings in the past, with the UAE pushing to utilize its expanded production capacity while Saudi Arabia advocated for supply restraint. These disagreements had previously brought Abu Dhabi close to exiting the group, though it had stopped short of doing so until now.
In recent years, the UAE has sought to assert a more independent foreign policy in the West Asia, at times diverging from Riyadh’s positions. Frictions have also grown as Saudi Arabia, under Crown Prince Mohammed bin Salman, stepped up efforts to attract foreign investment, directly competing with the Emirates.
The OPEC is an organization enabling the co-operation of leading oil-producing and oil-dependent countries in order to collectively influence the global oil market and maximize profit. It was founded on September 14, 1960, in Baghdad by the first five members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The organization currently comprises 12 member countries.
OPEC+ consists of 22 to 23 countries in total, comprising the 12 core OPEC member nations and 10-11 non-OPEC oil-producing allies, including Russia. This alliance, formed in 2016, aims to regulate global oil supply and prices. The decision comes at a time when the Iran war has already triggered a historic energy shock and unsettled the global economy.
The UAE has been a longstanding member of OPEC, initially through Abu Dhabi’s entry in 1967 and later as a unified nation after its formation in 1971. According to the latest OPEC figures, the UAE produces around 2.9 million barrels of oil annually, compared with Saudi Arabia’s roughly nine million barrels.
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