DUBAI: The United Arab Emirates said Tuesday it will leave OPEC effective May 1, stripping the oil cartel of one of its largest producers and further weakening its leverage over global oil supplies and prices.
The UAE had been a longtime member of OPEC, first through its emirate of Abu Dhabi in 1967 and later when the UAE became its own country in 1971.
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 added that following its withdrawal from the group, “the UAE will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions.”
The UAE’s decision had been rumored as a possibility for some time, as it pushed back in recent years against OPEC production quotas it felt had been too low — meaning it wasn’t able to sell as much oil to the world as it had wanted.
The UAE has been increasingly trying to leverage its own foreign policy in the Middle East that has contradicted some positions of Riyadh over time — particularly as Saudi Arabia began to directly challenge the Emirates in trying to draw foreign investments as the kingdom opened up under assertive Crown Prince Mohammed bin Salman.
Regional politics are also likely at play. The UAE has had increasingly frosty relations with Saudi Arabia, OPEC’s largest producer, over political and economic matters in the Mideast, even after both came under attack by fellow OPEC member Iran during the war.
The UAE’s withdrawal from OPEC won’t necessarily have any immediate effects in markets. That’s because world oil supplies are sharply constrained by the war in Iran, which has closed off the Strait of Hormuz, a waterway through which one-fifth of global oil supplies — including much of the UAE’s — is transported.
