UAE quits OPEC and OPEC+, citing ‘national interests’

The United Arab Emirates on April 28 announced that it was quitting oil-producers’ group OPEC, amid the global energy shock caused by the Iran war.

According to an official statement, the UAE, one of the world’s top oil producers, will pull out from the Organisation of the Petroleum Exporting Countries (OPEC) as well as OPEC+ from May 1.

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“This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile,” read the statement carried out by the official WAM news agency.

“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,” it added.

Notably, oil shipments in the Gulf continue to remain strangled by Iran’s blockade of the Strait of Hormuz, which flows past the UAE. It normally carries one-fifth of the world’s oil.

Being hard-hit by Iranian attacks, the UAE has faced major trouble in its relationship with Saudi Arabia, which is the world’s top oil exporter and a dominant force within OPEC+.

The UAE’s exit comes at a time when the Iran war has caused ⁠a major energy shock and unsettled the global economy.

Most of the OPEC Gulf producers have been struggling to ship exports through the Strait of Hormuz, which is a ‌narrow chokepoint between Iran and Oman.

The decision came after the UAE, ⁠one of the US’ most important allies, criticised fellow Arab nations for not doing enough to protect it from the Iranian attacks during the war.

OPEC decision driven by ‘national interests’

As per the official statement, the decision “reinforces the UAE’s commitment to its role as a responsible and reliable producer that anticipates the future of global energy markets”.

Further, it mentioned that the decision was “driven by national interests and the country’s commitment to actively contributing to meeting the urgent needs of the market, particularly given the ongoing geopolitical volatility in the near term, stemming from disruptions in the Arabian Gulf and the Strait of Hormuz, which impact supply dynamics”.

What is OPEC?

Founded in 1960, OPEC is counted among the most powerful players in the global supply of oil. The organisation produces over a third of global oil supply.

Following the UAE’s announcement to leave from May 1, the organisation now will have 11 members. It is a grouping of countries that coordinate and unify petroleum policies.

Among its members include Algeria, the Republic of the Congo, Equatorial Guinea, Gabon, Libya, Nigeria, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

In 2016, OPEC had signed an agreement with 10 other oil-producing countries, including Russia, to come up with OPEC+.