The United Arab Emirates has announced its departure from the Opec oil cartel after six decades of membership, dealing a significant blow to the group and its de facto leader, Saudi Arabia, as global energy markets face the biggest supply crisis in history.
The UAE, Opec's third-largest oil producer, said leaving the cartel would grant it greater flexibility to respond to a 'new energy age' in line with its long-term strategic vision. The exit is seen as a win for US President Donald Trump, who has previously accused Opec of 'ripping off the rest of the world' by inflating oil prices through production cuts.
The move comes as the Middle East enters the ninth week of the US-Israeli war on Iran, which has blocked a fifth of the world's seaborne oil from passing through the Strait of Hormuz, causing record volatility. Last week, Trump confirmed discussions with the UAE on a financial lifeline involving central bank currency swaps should the crisis deepen.
The departure lays bare long-running tensions between the UAE and Saudi Arabia over production limits and geopolitics. While Saudi ministers favoured curbs to support oil prices, the UAE grew frustrated with restrictions and is expected to boost output to fund its low-carbon transition. The UAE has a capacity of 4.8 million barrels per day and significant room to increase production.
Analysts say the exit weakens Opec structurally, as the UAE was one of the few members with meaningful spare capacity. The global oil price has reached as high as $119.50 a barrel since the Iran war began, rising 3% to about $111 on Tuesday. The UAE stated it would bring additional oil to market gradually, aligned with demand conditions.
