UAE Withdrawal from OPEC: A Strategic Shift in Oil Market Dynamics
Third largest OPEC producer's exit threatens cartel's structural strength and pricing control
LONDON, April 28. /TASS/. The UAE's withdrawal from OPEC and OPEC+ would be a significant blow to the oil cartel and its de facto leader, Saudi Arabia, the Financial Times wrote. This decision of the third largest OPEC state, which produced 3.4 million barrels of oil per day before the war in Iran, highlights its long-standing dissatisfaction with production quotas and tensions with Saudi Arabia. UAE Energy Minister Suhail al-Mazrouei told the newspaper that it was a "sovereign national decision grounded on the UAE's long-term strategic and economic vision and evolving energy profile. We've been active with the group and we've been supporting all of the decisions of the group, but it's a time where we need to look at the future. The timing in our view is right because it has a minimum impact on all of the producers." The story says it will be possible to fully assess the consequences of such a step after the resumption of energy transportation through the Strait of Hormuz. However, according to a statement provided to TASS by Jorge Leon, head of geopolitical analysis at consulting company Rystad Energy, the oil cartel will be "structurally weaker" without the UAE as reducing reserve capacity will make it more difficult for OPEC to "calibrate supply and stabilize prices."
