The United Arab Emirates (UAE) will leave OPEC, dealing a blow to the group and its leader Saudi Arabia as the global oil industry grapples with the massive supply disruption caused by the Iran war.
The UAE’s exit May 1 after six decades of membership is a significant loss for the group, which has spent years balancing global oil markets and defending prices by managing crude supplies. Before the conflict erupted, the country was OPEC’s third-biggest producer, accounting for roughly 12% of the group’s overall supply.
The move is also the latest indication of how the war in Iran will reshape global energy markets for years to come. While the UAE has talked in the past about quitting OPEC amid longstanding tensions with Saudi Arabia, Energy Minister Suhail Al Mazrouei said in an interview that the disruption caused by the war created an opportune time for the move.
“This is a decision that we took after a very careful and long review of all our strategies” he said. “The decision is taken at the right time in our view because it’s not going to hugely impact the market: the market is undersupplied.”
The UAE believes that the shortages caused by the war will require agility to respond to market demands without being constrained by the collective decision-making process of the wider group, he said.
The departure follows years of tension with the leader of the Organization of the Petroleum Exporting Countries, neighboring Saudi Arabia, both over oil output policy and competition for regional political influence. Officials at OPEC’s secretariat in Vienna and the Saudi Energy Ministry didn’t immediately respond to requests for comment.
The two had clashed occasionally at OPEC+ meetings as the UAE sought to deploy new investments in oil production capacity, while Riyadh pressed the group to restrain supply. Such disagreements had brought Abu Dhabi to the brink of quitting OPEC before, though it never followed through.
“The longer-term implication is a structurally-weaker OPEC,” said Jorge Leon, head of geopolitical analysis at Rystad Energy who previously worked at the OPEC secretariat. “Outside the group, the UAE would have both the incentive and the ability to increase production, raising broader questions about the sustainability of Saudi Arabia’s role as the market’s central stabilizer.”
Other countries have left the organization in recent years. Angola quit at the end of 2023 after its output declined and the group’s leaders sought to impose a reduced production quota. Ecuador departed in 2020 as its output fell. while in 2018, minor producer Qatar quit in order to focus on building up its natural gas sector.
US President Donald Trump has also repeatedly criticized OPEC over the years for its efforts to support oil prices.
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