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REUTERS The United Arab Emirates on Tuesday said it was quitting OPEC, dealing a blow to the oil producers’ group as an unprecedented energy crisis caused by the Iran war exposes discord among Gulf nations. The exit of the UAE – one of the group’s biggest prod
REUTERS
The United Arab Emirates on Tuesday said it was quitting OPEC, dealing a blow to the oil producers’ group as an unprecedented energy crisis caused by the Iran war exposes discord among Gulf nations.
The exit of the UAE – one of the group’s biggest producers – weakens OPEC’s control over global oil supplies and widens a rift between the UAE and its neighbour Saudi Arabia, effectively the leader of the Organization of the Petroleum Exporting Countries.
It could also free the UAE to increase output once exports via the Gulf resume as it would no longer be governed by OPEC quotas.
In his first public comments since the announcement, UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters in a telephone interview that the decision was taken after examining the country’s energy strategies.
He said the UAE had not discussed 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,” Mazrouei said.
He also said the world would demand more energy, implying the UAE would be positioned to meet that need.
Oil prices on international markets trimmed gains on Tuesday following the UAE’s announcement it would on May 1 leave OPEC and OPEC+, which brings together OPEC and allied producers.
Mazrouei said he did not expect much immediate market impact from the news because of constraints in the Strait of Hormuz.
OPEC Gulf producers have been struggling to ship exports through the Strait, 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.
As Gulf supplies have become stuck, the International Energy Agency said OPEC+’s share of global oil output fell to 44% in March from about 48% in February. It is likely to fall further in April as production shut-ins become more pronounced – and then further in May as the fourth biggest producer leaves the group.