The United Arab Emirates dealt a major blow to some of the world\u2019s biggest oil producers on Tuesday when it announced that it was leaving the OPEC oil cartel that has for decades sought to control global prices and fuel supplies.<\/p>\n
A coalition of around a dozen oil exporters, OPEC has steered prices by setting quotas for its members and allies. But the organization\u2019s power has slipped in recent years as production soared in nonmember countries, chiefly the United States.<\/p>\n
Before the war in Iran, the Emirates was one of OPEC\u2019s largest producers, after Saudi Arabia, Iraq and Iran, pumping around 3.6 million barrels a day of oil, or some 3 percent of global supply.<\/p>\n
Its departure from OPEC means little for oil prices at the moment because the U.S.-Israeli war with Iran has forced producers across the Persian Gulf to slash production. But in the long term, the move could contribute to greater volatility since less oil will be subject to production controls.<\/p>\n
OPEC countries supplied more than a quarter of the world\u2019s oil before the war. Russia and several other countries also coordinate with OPEC through a grouping known as OPEC Plus.<\/p>\n
Emirati officials had long floated the idea of quitting the cartel, complaining that quotas had unfairly limited their ability to export oil. In a sign of the abruptness of its break with a group that it had belonged to since 1967, the U.A.E. gave less than a week\u2019s notice, saying it would leave on Friday.<\/p>\n
The country, which has been aiming to boost its production capacity to five million barrels a day by 2027, is now expected to pump more to serve its own interests. That is, once tankers can resume travel through the Strait of Hormuz, the narrow waterway that divides Iran from the Arabian Peninsula.<\/p>\n
The strait has been all but closed since the war began in late February. The Emirates has the ability to send some oil around the strait through a pipeline, but it nevertheless was forced to slash oil output by more than a third in March, according to the International Energy Agency.<\/p>\n
Emirati officials decided to leave OPEC so that they would have more freedom to meet consumer demand, the country\u2019s energy minister, Suhail Al Mazrouei, said in an interview with The New York Times.<\/p>\n
\u201cThe world needs more energy, the world needs more resources and U.A.E. wanted to be unconstrained by any groups,\u201d Mr. Al Mazrouei said. The Emirates wanted to exit at a time that would cause minimal disruption to oil markets, he added.<\/p>\n
\u201cWe will remain as a responsible producer,\u201d Mr. Al Mazrouei said.<\/p>\n
The price of Brent crude oil, the main international benchmark, pulled back after the announcement but was still trading more than 2 percent higher than it was on Monday. Oil has risen more than 50 percent since the start of the war and the effective closure of the Strait of Hormuz, a transit point for a fifth of the world\u2019s oil.<\/p>\n
The announcement came amid festering tensions between the Emirates and Saudi Arabia \u2014 the de facto leader of OPEC. Once close allies, the two Gulf countries have diverged in recent years. The Emirates has increasingly gone its own way, pursuing closer ties to Israel and backing an armed separatist group in southern Yemen, where the Saudis are supporting the government.<\/p>\n
The war with Iran appears to have hardened that rift, as Saudi Arabia and the Emirates weigh differing strategies of how to respond to Iran. The Emirates \u2014 which hosts a major U.S. military base \u2014 has suffered thousands of Iranian missile and drone attacks. Emirati officials have spoken of their dissatisfaction with the response of regional multilateral organizations, including the Gulf Cooperation Council and the Arab League, hinting that they would have preferred a harsher unified stance against Iran.<\/p>\n
\u201cEvery Gulf state had its own policy of containment toward Iran, and all of those containment policies have failed,\u201d Anwar Gargash, a senior Emirati official, said in Dubai on Monday. \u201cAll our policies have failed miserably.\u201d<\/p>\n
Oil policy has, for years, also been a key source of tensions between the Emirates and Saudi Arabia.<\/p>\n
\u201cWhile Saudi Arabia aims to sustain oil markets for the next century, the U.A.E. feels no such urgency,\u201d said Bachar El-Halabi, senior analyst in Dubai at Argus Media, a commodities research firm. \u201cBecause their economy is more diversified, they do not require high oil prices to balance their budgets, allowing them to prioritize volume over price support.\u201d<\/p>\n
The departure of the Emirates will leave Saudi Arabia shouldering an even greater share of the responsibility of managing oil prices once international markets eventually stabilize.<\/p>\n
\u201cThe question is whether Saudi Arabia is willing to bear the lion\u2019s share of the burden of managing global oil markets with only a limited ability to support that from many other players,\u201d said Jason Bordoff, the founding director of the Center on Global Energy Policy at Columbia University.<\/p>\n
The Emirates\u2019 decision comes after Angola, Ecuador and Qatar left the cartel in 2024, 2020 and 2019. But the Emirates is a larger oil producer than those countries, and its decision is more consequential.<\/p>\n
Abu Dhabi \u2014 now the capital of the U.A.E. \u2014 joined OPEC in 1967, several years before the Emirates became a unified country.<\/p>\n
\u201cDuring our time in the organization, we made significant contributions and even greater sacrifices for the benefit of all,\u201d the Emirati state news agency said in a statement. \u201cHowever, the time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets.\u201d<\/p>\n
Ismaeel Naar and Rich Barbieri contributed reporting.<\/p>\n","protected":false},"excerpt":{"rendered":"The United Arab Emirates dealt a major blow to some of the world\u2019s biggest oil producers on Tuesday…\n","protected":false},"author":2,"featured_media":212747,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[128,1448,5292,83980,1480,5011,14670,9,24,63,5007,83979,1671,5291,7810,25505,62208,129,131,130,40124,901],"class_list":["post-212982","post","type-post","status-publish","format-standard","has-post-thumbnail","category-the-bronx","tag-bronx","tag-defense-and-military-forces","tag-fees-and-rates","tag-gulf-cooperation-council","tag-international-relations","tag-international-trade-and-world-market","tag-iran","tag-new-york","tag-new-york-city","tag-nyc","tag-oil-petroleum-and-gasoline","tag-organization-of-the-petroleum-exporting-countries","tag-politics-and-government","tag-prices-fares","tag-production","tag-saudi-arabia","tag-strait-of-hormuz","tag-the-bronx","tag-the-bronx-headlines","tag-the-bronx-news","tag-united-arab-emirates","tag-united-states"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/212982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=212982"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/212982\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/212747"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=212982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=212982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=212982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}