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(UPDATE 1) UAE Minister of Energy, Suhail Mohamed al-Mazrouei says the decision was taken after carefully looking at regional energy strategies.
DUBAI, United Arab Emirates – The United Arab Emirates said on Tuesday, April 28, it was withdrawing The group of oil producers OPECas an unprecedented energy crisis caused by Iran was it reveals the divisions between the Gulf states.
The loss of the UAE, a longtime member of OPEC, could destabilize and weaken the group, which has traditionally sought to show unity despite internal differences on issues ranging from geopolitics to production levels.
UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters the decision was taken after carefully looking at regional energy strategies.
When asked if the UAE consulted with OPEC’s top leader, Saudi Arabia, he said the UAE did not discuss the issue with any other country.
“This is a policy decision, it has been made after carefully looking at the current and future policies related to the level of production,” said the energy minister.
OPEC Gulf producers have already struggled to export through the Strait of Hormuz, the choke point between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, because of threats and attacks by Iran against shipping.
Mazrouei said the move, where the UAE will also leave the OPEC+ group, will not have a major impact on the market because of the crisis situation.
Win for Trump
The United Arab Emirates’ withdrawal from OPEC represents a victory for US President Donald Trump, who, in a 2018 speech to the United Nations General Assembly, accused the organization of “destroying the whole world” by raising oil prices.
Trump has also linked US military support for the Gulf to oil prices, saying that while the US defends OPEC members “they are exploiting this by keeping oil prices high.”
The move comes after the UAE, a regional trade and financial hub and one of Washington’s most important allies, criticized other Arab states for not doing enough to protect them from Iran’s multiple attacks during the war.
Anwar Gargash, diplomatic adviser to the UAE president, criticized the Arab and Gulf response to Iran’s attacks in a session at the Gulf Lobby Forum on Monday, April 27.
“The countries of the Gulf Cooperation Council supported each other logistically, but politically and militarily, I think their position has historically been weaker,” Gargash said.
“I expect this weak position from the United Arab States, and I am not surprised by it, but I do not expect it from the (Gulf) Cooperation Council, and I am surprised by it,” he said.
Mazrouei noted that the UAE has been a member of OPEC and OPEC+ for a long time, but said the world will demand more energy, suggesting his country’s move will help meet that demand.
The UAE’s withdrawal comes as global spare capacity hovers at historic lows, leaving the oil market increasingly tight.
Working outside the producer group allows the UAE to take full advantage of its position as a supplier of some of the lowest-priced and lowest-carbon barrels in the world.
Ultimately, the UAE sees its exit from the union as a positive outcome for consumers and the wider global economy, ensuring a more responsive and reliable energy supply. – Rappler.com
