Huge Blow To Global Oil Markets: UAE Exits OPEC, OPEC+ Amid Energy Crunch
The decision signals weakening coordination between the Gulf countries, and it comes at a time when global markets have taken a hit owing to the Iran war, and energy supply has come under strain.
- Republic Business
- 2 min read
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New Delhi: Amid the conflict in Iran and the chokehold over the Strait of Hormuz, the United Arab Emirates has made a major shift in its energy politics by exiting from Organization of the Petroleum Exporting Countries (OPEC) and OPEC+, the two major intergovernmental organizations that coordinate global petroleum policies.
The decision, which will come into effect on May 1, marks a major setback to the oil-producing alliance, which is effectively led by Saudi Arabia.
The decision signals weakening coordination between the Gulf countries, and it comes at a time when global markets have taken a hit owing to the war, and energy supply has come under strain.
The biggest concern that may have prompted UAE to take such a decision was the security of the Strait of Hormuz, the world's most critical energy corridor, through which a fifth of the world’s energy resources transit.
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Win For Trump
UAE's exit from the oil producers' group may indicate a big win for US President Donald Trump, who has earlier accused OPEC of "ripping off the rest of the world" by keeping oil prices artificially high.
In a sharp attack, Trump has also said that while the US defends OPEC members, they "exploit this by imposing high oil prices".
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Rift Between UAE And Gulf Nations
The decision to exit the oil producers' grouping comes after UAE, which has lately emerged to be a global business hub, and have lately emerged to be one of Washington's most important allies, criticised his fellow Arab nations for not acting aggressively to protect it from Iranian attacks during the ongoing Middle East war.