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The United Arab Emirates has announced that it has withdrawn from the oil-producers’ group OPEC, as an unprecedented energy crisis triggered by the Iran war has exposed discord among Gulf nations.
The announcement was made on Tuesday, April 28. The loss of the UAE, a longstanding OPEC member, could create chaos and weaken the group, which has usually sought to present itself as a united body despite internal conflicts over a range of issues, from geopolitics to production quotas.
The UAE Energy Minister, Suhail Mohamed al-Mazrouei, told Reuters in an interview that the decision was taken after careful review of the regional power’s energy strategies. When asked whether the UAE consulted with OPEC’s de facto leader, Saudi Arabia, he said the UAE did not raise the issue with any other country.
“This is a policy decision, it has been done after a careful look at current and future policies related to level of production,” said the energy minister.
OPEC Gulf producers have long struggled to ship exports through the Strait of Hormuz, a chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, due to Iranian threats and attacks on vessels.
Mazrouei went further, saying that the action, which will also see the UAE leave the OPEC+ grouping, would not have a significant impact on the market given the situation in the Strait. However, the UAE’s exit from OPEC portrays a win for U.S. President Donald Trump. In 2018, he addressed the U.N. General Assembly, accusing the organisation of “ripping off the rest of the world” by inflating oil prices. Trump has linked U.S. military support for the Gulf with oil prices, saying that while the U.S. defends OPEC members, they “exploit this by imposing high oil prices”.
The move came after the UAE, a regional business and financial hub and one of Washington’s most important allies, criticised 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, criticised 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. 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,” Gargash said.
Mazrouei stated that the UAE has been a member of OPEC and OPEC+ for a long time, but he said the world would demand more energy, suggesting his country’s move will help meet those needs.
The UAE’s departure comes as global spare capacity remains at historic lows, further tightening the oil market. Operating outside OPEC lets the UAE fully exploit its status as a supplier of some of the world’s cheapest and lowest-carbon oil.
