UAE leaves OPEC!

UAE, Dubai
Photo: newswire.lk

The United Arab Emirates said on Tuesday it was quitting oil-producers' group OPEC, as an unprecedented energy crisis triggered by the Iran war exposes discord among Gulf nations, Reuters reports.

The loss of the UAE, a longstanding OPEC member, 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.

UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters the decision was taken after a careful look at the regional power's energy strategies.

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 already been struggling 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, because of Iranian threats and attacks against vessels.

The move came after the UAE, a regional business and financial 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.

Operating outside the ⁠producer group allows the UAE to fully leverage its position as a supplier of some of the world's lowest-cost and lowest-carbon barrels.

Ultimately, the UAE views its exit from the bloc as a net positive for consumers and the broader global economy, ensuring a more responsive and reliable energy supply.

... In addition to political disagreements with Saudi Arabia the reason that forced the UAE to leave OPEC is obvious. All OPEC members have quotas limiting the amount of oil they can sell on the global market although many of them have violated and continue to violate the quotas to this day. Now the UAE can sell as much of its oil as it wants, thereby earning money for the country's recovery after the Gulf War bypassing the Strait of Hormuz  using its port in Fujairah, which has direct access to the Indian Ocean.

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