UAE’s Decision To Withdraw From OPEC The United Arab Emirates (UAE) has announced its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC) and the expanded OPEC alliance (OPEC Plus).
This is considered a major setback for the Organization of the Petroleum Exporting Countries and its main influential member, Saudi Arabia.
Despite international disagreements, the group has tried to keep oil-exporting nations united, although disputes over geopolitics and production quotas have occasionally surfaced.
The UAE is one of the world’s largest oil producers. A statement issued by the UAE’s official news agency said: “This decision reflects the UAE’s long-term strategic and economic vision related to its energy profile.”
Speaking to the news agency, UAE Energy Minister Suhail Mohammed Al Mazrouei said the decision was taken after a serious assessment of regional energy strategies. He also clarified that there were no discussions with other countries on the matter.
OPEC 60 years old
OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The aim was to protect the interests of member countries by coordinating oil production and ensuring stable income.
Later, countries such as Algeria, Equatorial Guinea, Gabon, Libya, Nigeria and the Republic of Congo also joined it. The UAE became a member in 1967. Now, with the UAE’s exit, the number of members will drop to 11. OPEC Plus has 10 non-OPEC members, including Russia.
What will be the impact?
Analysts have seen the UAE’s decision as a sign of the “beginning of the end” for OPEC. According to Saul Kavonic, head of energy research, “OPEC will lose about 15 percent of its production capacity if the UAE leaves.”
This is seen as a major blow, especially for Saudi Arabia. According to a British newspaper, the exit of a long-standing member like the UAE could lead to chaos in the group and weaken the organization.
Long-term impact
According to economist Monica Malik, the UAE could increase its share of the global market once the post-war situation normalizes. This is expected to provide some relief to consumers and the global economy.
Meanwhile, the decision is seen as positive for US President Donald Trump. He has previously accused OPEC of “exploiting the world” and has been pressuring it to lower oil prices.