Economy News

UAE quits OPEC after nearly 60 years, but oil above $110 barely moves

The United Arab Emirates announced on Tuesday 28 April that it will leave OPEC and the wider OPEC+ alliance from 1 May, publishing the decision through its state news agency WAM. NPR quotes the statement as saying the move reflects the UAE's “long-term strategic and economic vision and evolving energy profile”. According to Egyptian Streets, the UAE joined OPEC through Abu Dhabi in 1967, is the group's third-largest producer, and pumped about 3.4 million barrels a day before the regional conflict, with capacity of roughly 5 million. OPEC accounts for about 40% of world crude supply.

Markets barely reacted. NPR reports that crude stayed above $110 and did not move on the day, because the near-closure of the Strait of Hormuz caps UAE exports for now, so any extra output cannot reach buyers immediately.

“Probably lower oil prices, but also more volatile oil prices.” — Jorge Leon, Rystad Energy, via NPR

How each outlet framed it

• NPR — quota frustration and a widening Saudi-UAE rift over Yemen and economic rivalry; with a smaller spare-capacity buffer, prices could be more likely to spike in future crises.
• AP — the official line that the UAE “reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets”, with tensions with Saudi Arabia in the background.
• Egyptian Streets — a blow to the cartel's power, recalling Qatar's 2019 exit, while noting Energy Minister Suhail al-Mazrouei said the move was not the result of a dispute with Riyadh.

What we don't know yet: how fast the UAE can raise output once Hormuz traffic recovers, and whether other members follow. Gianna Bern of the University of Notre Dame told NPR that OPEC would be less powerful and less nimble even if none do.