The United Arab Emirates has announced its withdrawal from the Organisation of Petroleum Exporting Countries (OPEC).
It is also withdrawing from the global oil bloc’s wider alliance, OPEC+.
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The UAE energy ministry announced this in a statement on Tuesday.
It stated that the decision reflects its “long-term strategic and economic vision and evolving energy profile”.
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The decision, it said further, follows “a comprehensive review of the UAE’s production policy and its current and future capacity.”
It is also “based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs.”
The UAE’s formal exit has been set for Friday, the 1st of May.
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This decision comes in the wake of the US-Israel war on Iran and the struggle over control of the Strait of Hormuz, which has caused a global energy shock.
Since the start of the war, exports from OPEC Gulf states have been increasingly constrained as shipments through the Strait of Hormuz—a narrow waterway through which about 20 per cent of global oil and liquefied natural gas is transported —have been disrupted.
The UAE joined OPEC in 1967, and its departure will leave the oil cartel with 11 members. It is also one of the largest oil producers in the group.
OPEC data show that the UAE produces about 2.9 million barrels of oil per day, while Saudi Arabia, OPEC’s leading member, produces about 9 million barrels per day.
ALSO READ: OPEC+ hikes production amidst war
The UAE’s exit would mean that OPEC would lose about 15 per cent of its capacity and one of its most compliant members.
The impact of the withdrawal might not be felt immediately due to the row over the Strait of Hormuz, but it would be felt long-term.
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