In a dramatic escalation of regional tensions, The UAE announced on Tuesday its departure from OPEC and OPEC+, effective 1 May, shaking the global energy market, as this sudden exit deals a heavy blow to the oil-exporting groups. This historic shift occurs as the war with Iran causes a massive energy shock and continues to unsettle the global economy.
The loss of the UAE, a longstanding member, could weaken the group and create significant disarray among the remaining oil nations. Consequently, this move threatens the united front that the organization typically maintains despite internal disagreements over geopolitics and production quotas.
UAE Energy Minister Suhail Mohamed al-Mazrouei informed Reuters that the government reached this decision after reviewing the regional power’s energy strategies. When reporters asked whether the UAE consulted with Saudi Arabia, the minister clarified that officials 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,” the minister stated.
Navigating the Strait of Hormuz
Gulf producers currently struggle to ship exports through the Strait of Hormuz, a critical chokepoint between Iran and the nation of Oman. A fifth of the world’s crude oil and liquefied natural gas normally passes through this narrow waterway despite recent Iranian threats. Mazrouei claimed the move would not have a huge impact on the market because of the ongoing situation in the strait.
However, the exit represents a major political win for US President Donald Trump, who frequently criticizes the organization for high prices. Trump previously linked US military support for the Gulf with oil costs, suggesting that OPEC members exploit American defense for profit.
Breaking Regional Alliances
The move follows recent criticism from the UAE regarding how fellow Arab states responded to Iranian attacks during the current war. Anwar Gargash, the diplomatic adviser for the UAE president, criticized the Arab and Gulf response during a forum held on Monday.
“The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically,” Gargash said. He further noted his disappointment regarding the lack of unified support from regional partners during this period of conflict.
“I expect this weak stance from the Arab League, and it does not surprise me. However, the (Gulf) Cooperation Council’s position surprises me,” he concluded.
