In a massive development, the United Arab Emirates (UAE) has announcedย to pull out of major oil producer groups OPEC and OPEC+,ย effective May 1. The announcement comes at a time when the ongoing conflict involving the United States, Israel and Iran has already triggered a massive energy shock which has pushed global markets into deeper uncertainty.ย ย The UAE made the announcement via its state-run WAM news agency. “This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets,”ย the UAE said.
It also comes as the UAE has increasingly come into conflict with Saudi Arabia, particularly over economic issues and the war in Yemen against the Iran-backed Houthi rebels. The UAE, one of the most influential and long-associated members of OPEC, has traditionally played a key role in shaping the bloc’s strategies. Its sudden departure is being seen as a major setback for the group, especially at a moment when the global economy is reeling from severe supply disruptions and volatility.ย
UAE exit threatens OPEC unityย
As per reports, the departure of the United Arab Emirates is likely to unsettle the group and weaken its collective strength. The bloc, which has historically projected unity despite differences over geopolitical issues and production limits, now faces the risk of growing internal strain.ย At the same time, Gulf producers within OPEC are grappling with serious logistical challenges. Oil shipments through the Strait of Hormuz, a critical global transit route between Iran and Oman that carries nearly one-fifth of the world’s crude and LNG supplies, have been disrupted due to Iranian threats and attacks on vessels.
Aboutย OPEC andย OPEC+
The Organisation of the Petroleum Exporting Countries (OPEC) is an organisation enabling the co-operation of leading oil-producing and oil-dependent countries in order to collectively influence the global oil market and maximise profit. It was founded on September 14, 1960, in Baghdad by the first five members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The organisation currently comprises 12 member countries.ย
OPEC+ consists of 22 to 23 countries in total, comprising the 12 core OPEC member nations and 10-11 non-OPEC oil-producing allies, including Russia. This alliance, formed in 2016, aims to regulate global oil supply and prices.
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