UAE Withdraws from OPEC After 60 Years

The United Arab Emirates announced its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC), effective May 1, after nearly 60 years as a member. Multiple sources confirmed the departure, which allows the UAE to increase oil output independently during a period of market volatility.

The exit stems from disputes over production levels within the cartel, with the UAE seeking greater flexibility to boost its output. Sources indicate this reflects broader regional rivalries, particularly between the UAE and Saudi Arabia, though no official confirmation of specific conflicts was provided.

One source described the decision as a long time coming, tied to changing circumstances in global oil supply and distribution among members.

The withdrawal could reduce OPEC's influence over global oil markets, as the UAE's departure removes a significant producer from the group's coordinated efforts. It may lead to lower oil prices, potentially benefiting consumers by driving down gasoline costs, according to reports.

African oil producers like Nigeria and Angola could face economic challenges if a looser OPEC erodes the price floor supporting their economies.

A UAE official stated that the country is reassessing its roles in various multilateral organizations but is not considering additional withdrawals at this time. The official, speaking anonymously, emphasized that the review focuses on the utility of memberships broadly.

The departure is seen as a crisis for OPEC+, with sources noting that cartels often fail due to new supply sources and shifting production dynamics.

The move has been characterized as a blow to the cartel, which primarily consists of Gulf oil exporters and oversees production to influence global prices. Reports suggest it could affect energy politics in the region, representing a deeper fight over the future of oil-dependent economies. No immediate responses from other OPEC members were detailed in the sources.