The United Arab Emirates will leave OPEC, the group that brings together some of the main oil-exporting countries, effectively led by Saudi Arabia. It is a decision that comes at a very delicate moment – the crisis of fossil fuel prices and supplies triggered by the war with Iran – and that could weaken the internal cohesion of the organization, which has always sought to maintain a common line despite the numerous and often deep divergences among member countries. Iran and Venezuela, for example, are also part of the cartel.
AN AUTONOMOUS DECISION
The United Arab Emirates Energy Minister, Suhail Mohamed al-Mazrouei, explained to Reuters that the choice to leave OPEC is the result of a review of the energy strategies of the Persian Gulf countries. The decision was made autonomously, without consulting other nations, and is precisely linked to the “current and future policies regarding production levels” of oil.
A VICTORY FOR TRUMP
The geopolitical implications of Abu Dhabi’s move will likely be very significant. It is a victory for the United States, first of all, whose president Donald Trump had heavily criticized OPEC’s energy policies back in 2018, accusing the organization of artificially keeping crude prices high through production cuts and hinting at a possible revision of American military aid to Gulf countries: the Emirates are one of the main US allies in the region.
THE REASONS FOR THE EMIRATES’ EXIT FROM OPEC
It also seems that the Emirates were dissatisfied with the actions of other Gulf countries regarding political and military support against Iranian attacks on energy infrastructures.
In addition to this, there are also “market” considerations. Beyond the current moment, in which exports are practically halted due to the blockade of the Strait of Hormuz, the possibility of operating outside OPEC’s constraints would indeed allow the Emirates to fully exploit their competitive advantage: vast availability of oil reserves, low production costs, and a contained carbon footprint.
