The UAE’s historic decision is a major blow to the alliance of oil producers, just as the global energy crisis is escalating over Iran’s blockade of the Strait of Hormuz, but the Gulf state insists its decision “enhances the UAE’s ability to respond to evolving market needs."
The United Arab Emirates announced on Tuesday that it will leave the Organisation of the Petroleum Exporting Countries (OPEC) effective 1 May.
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“The time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets," the UAE said in a statement to state news agency WAM.
The UAE explained that its decision “follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs.”
The UAE’s dramatic decision to quit the alliance of the world’s biggest oil producers and make its own sovereign decisions away from Saudi Arabia and the other OPEC members strikes a heavy blow to the oil exporting countries who produce a third of the global oil supply and signals a fundamental reshape of the global energy interactions, just as the global energy crisis is escalating over Iran’s blockade of the Strait of Hormuz.
The UAE has previously criticised the OPEC members for inaction and lack of support during Iran’s attacks on the Gulf state, which absorbed most of the Iranian missiles and drones.
To reassure the markets amid the spiralling global energy crisis, the UAE said that it “will continue to act responsibly," adding that the decision ”enhances the UAE’s ability to respond to evolving market needs."
In addition, the UAE explained that its decision is “driven by national interests and the country’s commitment to actively contributing to meeting the urgent needs of the market, particularly given the ongoing geopolitical volatility in the near term, stemming from disruptions in the Arabian Gulf and the Strait of Hormuz, which impact supply dynamics.”
One of the world’s major oil producers, the UAE has been insisting that OPEC members should do more for the alliance and for the Gulf states attacked by Iran and in its statement on Tuesday, it underlined that it “made significant contributions and even greater sacrifices for the benefit of all.”
In its statement, the UAE is insisting that its decision is meant to better serve global energy markets, underlining that “the UAE is a trusted producer of some of the world’s most cost-competitive and lower-carbon barrels, which will play an important role in supporting global growth and emissions reduction."
The Gulf state explained that “this decision aligns with the UAE’s long-term strategic and economic vision and the development of its energy sector."
"It reinforces the UAE’s commitment to its role as a responsible and reliable producer that anticipates the future of global energy markets," the statement said.
The UAE announcement comes a day after a key statement by Anwar Gargash, the UAE president’s diplomatic advisor, saying that "the Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically."
"I expect this weak stance from the Arab League, and I am not surprised by it, but I haven't expected it from the GCC, and I am surprised by it," Gargash told the Gulf Influencers Forum on Monday.