UAE energy minister says no direct consultations held on leaving cartels, including with Saudis; Gulf oil producers already struggling with exports due to Iran’s Hormuz blockade.
The United Arab Emirates said on Tuesday it was quitting OPEC and OPEC+, dealing a heavy blow to the oil exporting groups and their de facto leader, Saudi Arabia, at a time when the Iran war has caused a historic energy shock and unsettled the global economy. The loss of the UAE, a longstanding OPEC member, could create disarray and weaken the group, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.
UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters the decision was made after a careful look at the regional power’s energy strategies. Asked whether the UAE had consulted with Saudi Arabia, he said the UAE had not raised the issue with any other country. “This is a policy decision. It has been done after a careful look at current and future policies related to level of production,” said the energy minister.
OPEC Gulf producers have already been struggling to ship exports through the Strait of Hormuz, a chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, because of Iranian threats and attacks against vessels. Mazrouei said the move would not have a huge impact on the market because of the situation in the strait. But the UAE exit from OPEC represents a win for US President Donald Trump, who has accused the organization of “ripping off the rest of the world” by inflating oil prices.
Trump has also linked US military support for the Gulf with oil prices, saying that while the US defends OPEC members, they “exploit this by imposing high oil prices.” The move came after the UAE, a regional business hub and one of Washington’s most important allies, criticized fellow Arab states for not doing enough to protect it from numerous Iranian attacks during the war. Anwar Gargash, the diplomatic adviser for the UAE president, criticized the Arab and Gulf response to the Iranian attacks in a session at the Gulf Influencers Forum on Monday. (Read More)