UAE exits OPEC amid Iran war, Reuters reports
Photo: Mohamed bin Zayed Al Nahyan, President of the UAE (Getty Images)
The United Arab Emirates has announced it is leaving OPEC and OPEC+ at the worst possible moment for the oil cartel, when the war with Iran has disrupted shipments through the Strait of Hormuz, Reuters reports.
According to the outlet, the time of the exit is extremely painful for OPEC. Gulf countries are already facing difficulties exporting through the Strait of Hormuz, a narrow maritime passage between Iran and Oman.
About a fifth of the world’s oil and liquefied natural gas typically passes through this route. Oil producers in the region are already under pressure, and now OPEC is also losing one of its key members.
What is OPEC and why does it matter
OPEC is an organization of oil-producing countries that coordinates how much oil to produce in order to influence global prices. OPEC+ is an expanded version that also includes countries outside the group, in particular Russia.
The UAE is one of the world’s largest oil producers. The exit of such a major player undermines the cartel’s unity and weakens the position of its de facto leader, Saudi Arabia.
A win for Trump?
The UAE’s exit is a major win for US President Donald Trump. He has long criticized OPEC, accusing the organization of artificially inflating oil prices at the expense of the rest of the world.
Trump said that while the US protects OPEC members, they "exploit this by imposing high oil prices".
He also directly linked US military support for Gulf countries to fuel prices.
Reuters reports that the UAE’s exit could trigger turmoil within the organization. The OPEC has traditionally tried to project unity even amid internal disputes over production quotas and geopolitics.
As reported earlier, Brent crude rose nearly 2% to a three-week high of $107.97 per barrel after US-Iran talks hit a deadlock.
In Ukraine, shifts in global oil prices directly affect fuel costs at gas stations.
