UAE Exits OPEC on May 1, Sending Ripples Through Global Energy Markets
Energy minister says move driven by goal to reach 5 million barrels per day capacity by 2027, as analysts warn other members could follow
The United Arab Emirates will exit OPEC on May 1, with Energy Minister Suhail Al Mazrouei telling CNBC they want more freedom to hit their goal of 5 million barrels per day of capacity by 2027, but that they "have the highest respect for the Saudis for leading OPEC.
Oil is trading around the flatline, with Asian stocks and European futures also relatively muted. We've just had a trio of European bank earnings - UBS posted a $3 billion first quarter profit beat, Santander net profit surged 60% and Deutsche Bank also beat bottom line forecasts. But Airbus missed expectations. CEO Guillaume Faury told CNBC that airlines aren't cancelling orders amid the Iran conflict, but said we are at the beginning of what could be a "long and non-linear crisis".
Staying in the sector, Ryanair CEO Michael O'Leary told CNBC European airlines could fail if the jet fuel price doesn't fall. Stateside, it is all eyes on the Federal Reserve today for what is very likely to be Chairman Powell's final decision and press conference. The Senate Banking Committee is expected to vote today to advance Kevin Warsh's nomination as Chair to the full Senate.
UAE's departure from the OPEC oil cartel is not without precedence. Who could be next? The United Arab Emirates' shock decision to leave OPEC is reverberating across global energy markets, exposing fractures in the powerful oil cartel as production quotas risk prompting other members to follow suit.
"The UAE exit is another chapter in the changing membership of the group," said Andy Lipow, president of Lipow Oil Associates. "If countries that are abiding by their quota get disgusted with those that don't, we could see additional exits that could eventually make OPEC irrelevant as a cartel," he told CNBC via email.
Countries, including Qatar, Ecuador and Angola have left the group in past years, citing frustration with quotas or shifting national priorities. Angola left in 2024, while Qatar terminated its membership in 2019.
