UAE Withdraws from OPEC in Major Blow to Saudi Arabia and Cartel
Decision signals shift in Gulf energy politics, could undermine OPEC+ supply control efforts
The UAE's decision to withdraw from OPEC and OPEC+ will deal a significant blow primarily to Saudi Arabia, according to experts. The withdrawal represents a major shift in Gulf energy politics and could undermine the efforts of OPEC+ to control and regulate oil supplies and adjust production in line with global demand.
Khalil Jahshan, Executive Director of Arab Center Washington DC, said he would view this as "the first expression of the economic and political fallout from the Iran war on the Arab side of the Gulf."
Nabil Jaafar Al-Marsoumi, an energy expert, emphasized that "it cannot be ruled out that this move by the UAE will undermine the efforts of OPEC and OPEC+ to control and regulate oil supplies and adjust production in line with global demand." He noted the UAE's desire to profit from excess capacity.
According to the Emirates state news agency, the UAE's decision to exit OPEC and OPEC+ "reflects the UAE's long-term strategic and economic vision and evolving energy profile."
Analysts note that Saudi Arabia is now left doing more of the heavy lifting on price stability, and the market loses one of the few shock absorbers it had left. The Financial Times reported that it will be possible to fully assess the consequences of the step after the resumption of energy transportation through the Strait of Hormuz.
