The United Arab Emirates (UAE) announced on Tuesday that it will withdraw from the oil-producing groups OPEC and OPEC+ effective May 1. This move had been a subject of discussion for some time, as discontent within the UAE regarding production quotas had been mounting, and its regional relations with Saudi Arabia were becoming increasingly strained. Notably, the UAE has been a member of OPEC for several decades. It first joined the organization in 1967 through Abu Dhabi and subsequently became a full member in 1971, following the country’s formation.
Was Competition with Saudi Arabia the Cause of the Split?
In recent years, the UAE has sought to pursue an independent foreign policy in the Middle East—one that has diverged from Saudi Arabia’s policies on various issues. This became particularly evident when Saudi Arabia, under the leadership of Crown Prince Mohammed bin Salman, adopted aggressive economic policies to attract foreign investment, thereby intensifying competition between the two nations. The UAE announced its withdrawal from OPEC and OPEC+ through its official state news agency, WAM. The statement noted that this decision reflects the country’s long-term strategy and economic outlook.
‘Will Continue Additional Oil Production in the Market’
The UAE stated that it is rapidly investing in its domestic energy production capacity and remains committed to playing a responsible, reliable, and forward-looking role in the global energy market. The statement further added that, even after withdrawing from OPEC, the UAE will continue to contribute additional oil production to the market in a gradual and balanced manner, in accordance with demand and prevailing market conditions. OPEC, headquartered in Vienna, has long been regarded as a pivotal organization within the global oil market.
OPEC’s Influence Has Waned in Recent Years
In recent years, OPEC’s market influence has diminished somewhat due to increased oil production by the United States. Saudi Arabia, however, continues to be regarded as OPEC’s most influential member. Competition between the UAE and Saudi Arabia regarding economic and regional issues has also intensified, particularly within the Red Sea region. The two countries had worked together in 2015 as part of a military coalition against the Iran-backed Houthi rebels in Yemen, but relations subsequently became strained. Following this decision by the UAE, it is anticipated that there will be a significant impact on global energy markets and the geopolitics of the Middle East.
