finance
UAE Exits OPEC on May 1
The United Arab Emirates announced its withdrawal from OPEC effective May 1, citing national interests and a desire to increase oil production. The move comes as oil prices surged above $110 per barrel due to the ongoing U.S.-Iran conflict and the closure of the Strait of Hormuz. Wall Street saw declines in AI stocks, while energy firms like BP reported boosted profits from higher prices.
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The United Arab Emirates announced Tuesday it will leave OPEC and OPEC+ effective May 1, becoming the latest member to exit the oil cartel amid tensions from the U.S.-Iran war. UAE Energy Minister Suhail Mohamed al-Mazrouei stated the decision followed an extensive review of the country's oil production policy, emphasizing it aligns with national interests.
The UAE, OPEC's third-largest producer behind Saudi Arabia and Iraq, joined the organization in 1967. Multiple sources reported the exit weakens OPEC's influence over global oil supplies and prices, as the UAE has pushed against production quotas it viewed as too restrictive.
The announcement coincides with Brent crude prices climbing 2.7 percent to $111.18 per barrel for June delivery, driven by uncertainty over the Iran conflict. Traders are focusing on July contracts, which rose 2.6 percent to $104.33.
Oil prices have risen from around $70 in late February, nearing peaks of $119 amid fears of prolonged disruption in the Strait of Hormuz, where 20 percent of global oil exports pass. The strait remains effectively closed, trapping tankers in the Persian Gulf.
The Trump administration appeared unlikely to accept Iran's offer to reopen the strait in exchange for lifting the U.S. blockade, with Secretary of State Marco Rubio ruling out postponing nuclear program discussions in a Fox News interview. U.S. gasoline prices reached $4.18 per gallon on Tuesday, the highest since 2022, according to AAA.
Chevron CEO Mike Wirth said in a Sunday interview that upward pressure on oil prices from the conflict is likely to continue, as significant supply has been removed from the system. The war has entered its second full month.
and Corporate Earnings Wall
Street's rally halted Tuesday, with the S&P 500 falling 0.6 percent from its all-time high, dragged by slumping AI stocks. Nvidia sank 2.5 percent, Broadcom dropped 4.8 percent, and Micron Technology fell 4.3 percent, following a Wall Street Journal report on concerns at OpenAI about supporting massive data center spending after missing user and revenue targets.
