UAE Quits OPEC Alliance, Citing National Interest Amid Oil Crisis

UAE’s Role as a Key Oil Producer

UAE was never a marginal player. It was the 3rd largest producer after Saudi Arabia and Iraq, an integral Gulf state and its cooperation lent OPEC its credibility as a price managing entity.
With UAE gone, OPEC will be left with 12 members. The move came after increasing frustration in Abu Dhabi which feels that it has been abandoned by its Arab countries in face of repeated Iranian attacks in the ongoing conflict.

UAE Announces Exit from OPEC Alliance

UAE said the decision was intended to "prioritize its national interest. The UAE has sometimes had differing opinions on the limits set by OPEC and production levels. The statement cited UAE's long-term strategic and economic interests and a shift in its energy sector.
"During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all. However, the time has come to focus our efforts on what our national interest dictates,” the official statement said.

Strait of Hormuz Disrupts Oil Supply

OPEC had usually emphasized unity, even in cases of disagreement on issues including geopolitical events to output volumes.
Meanwhile, Gulf producers of OPEC have already been having a difficult time exporting their crude due to disruptions in the Strait of Hormuz, which is a narrow body of water between Iran and Oman that handles about a fifth of global oil and liquefied natural gas shipments. Iranian threats and attacks on oil tankers have made it even more difficult to move energy supplies to various destinations.

What Are OPEC and OPEC+?

Organization of the Petroleum Exporting Countries or OPEC is an international cartel of major oil producers. OPEC coordinates its petroleum production policies to help manage the global oil supply and influence crude prices effectively.
OPEC+ is a looser pact of OPEC and other major non-OPEC oil producers, including Russia. This pact also seeks to harmonize its crude oil output with an objective to stabilize the world oil market.