The United Arab Emirates announced on Tuesday its departure from the Organization of the Petroleum Exporting Countries (OPEC), a move that underscores deepening divisions among Gulf nations amid the unprecedented energy crisis triggered by the Iran war. The loss of the UAE, a long-standing OPEC member, could create disarray and weaken the group, which has traditionally sought to present a united front despite internal disagreements over geopolitics and production quotas.
Reasons Behind the Exit
UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters that the decision was made after a careful review of the regional power's energy strategies. When asked whether the UAE consulted with OPEC's de facto leader, Saudi Arabia, he stated that 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, due to Iranian threats and attacks against vessels. Mazrouei indicated that the move, which also includes leaving the OPEC+ grouping, would not have a huge impact on the market because of the situation in the strait.
A Win for Trump
The UAE’s exit from OPEC represents a win for U.S. President Donald Trump, who in a 2018 address to the U.N. General Assembly accused the organization of “ripping off the rest of the world” by inflating oil prices. Trump has also 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, criticized 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, criticized 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,” Gargash said. “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,” he added.
Implications for the Oil Market
Mazrouei noted 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 exit comes as global spare capacity hovers at historically low levels, leaving the oil market increasingly tight. 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.
