United Arab Emirates Says It Will Leave OPEC in Blow to Oil Cartel
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United Arab Emirates Says It Will Leave OPEC in Blow to Oil Cartel
The Gulf government has long complained about the group’s quotas, which officials believe unfairly limited its exports.
Reporting from Riyadh, Saudi Arabia
The United Arab Emirates will leave OPEC, a cartel of oil-producing countries, next month, its government said on Tuesday.
Emirati officials had long floated the idea of quitting the cartel, complaining that its quotas had unfairly curtailed its oil exports.
The decision represents a further weakening of OPEC, whose power over global oil markets had slipped as U.S. oil production soared.
The Emirates decided to leave an organization that it has belonged to for decades in light of the government’s “long-term strategic and economic vision” and its plans to accelerate investment in energy production, according to a statement published by WAM, the Emirati state news agency.
The statement referred to the government’s desire to meet the demands of energy markets during a period of geopolitical strain caused by the U.S.-Israeli war with Iran, which has sent oil and gas prices soaring. It also said that the Emirati government believes global energy demand will result in “sustained growth” in the medium to long term.
“The U.A.E.’s decision to exit from OPEC reflects a policy-driven evolution aligned with long-term market fundamentals,” the country’s energy minister, Suhail al-Mazrouei, wrote on social media. “We thank OPEC and its member countries for decades of constructive cooperation.”
The price of Brent crude oil, the international benchmark, pulled back after the announcement but was still trading 3 percent higher than it was on Monday. Oil has risen more than 40 percent since the first U.S.-Israeli strikes on Iran in late February and the effective closure of the Strait of Hormuz, a transit point for a fifth of the world’s oil.
Before the war, the Emirates was producing about 3.6 million barrels of oil per day, according to the International Energy Agency — roughly 12 percent of OPEC’s overall production.
“The U.A.E. will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions,” the statement published by the Emirati state news agency said.
The announcement came amid festering tensions between the Emirates and Saudi Arabia — the de facto leader of the cartel. Once close allies, the two Gulf countries have diverged in recent years, and the Emirates has increasingly gone its own way in the region, pursuing closer ties to Israel and backing an armed separatist group in southern Yemen.
Who is a member of Opec?
Source: Organization of the Petroleum Exporting Countries.
The New York Times
The war with Iran appears to have hardened that rift, as Saudi Arabia and the Emirates weigh differing strategies of how to respond to Iran. The Emirates — which hosts a major U.S. military base — has faced thousands of Iranian missile and drone attacks. Emirati officials have spoken of their dissatisfaction with the response of regional multilateral organizations, including the Gulf Cooperation Council and the Arab League, hinting that they would have preferred a harsher unified stance against Iran.
Ismaeel Naar, Rich Barbieri and Rebecca F. Elliott contributed reporting.
Vivian Nereim is the lead reporter for The Times covering the countries of the Arabian Peninsula. She is based in Riyadh, Saudi Arabia.