The United Arab Emirates announced Tuesday that it will leave the oil cartel OPEC and its wider OPEC+ group effective May 1. The move ends a 59-year membership that began through the emirate of Abu Dhabi in 1967. UAE officials stated the decision follows an extensive review of the country's oil production policy and is intended to focus on national interests and a strategic realignment.
The withdrawal comes amid a historic energy shock and global economic instability driven by the Iran war. As Iran talks stumbled and a blockade of the Strait of Hormuz complicated export shipments for Gulf producers, U.S. crude oil surpassed $100 per barrel for the first time since April 10. The UAE insists the decision enhances its ability to respond to evolving market needs and changing demand.
The UAE, which was the third-largest producer in OPEC in February behind Saudi Arabia and Iraq, had long expressed frustration with production quotas. Officials believed these restrictions unfairly limited their exports, and the Emirates had developed increasingly frosty relations with neighboring Saudi Arabia.
Analysts view the departure as a heavy blow that weakens the Organization of the Petroleum Exporting Countries, which has been long criticized by Donald Trump. While the move allows the UAE to raise output during one of the most volatile energy markets in years, the exit is considered a big win for US President Donald Trump.