The United Arab Emirates says it plans to leave both the OPEC and OPEC+, significantly impacting the oil production export market. The UAE’s exit will be effective on May 1, the country’s energy ministry said Tuesday. • United Arab Emirates was the third-largest producer in OPEC behind Saudi Arabia and Iraq, leaving a huge hole in the oil production organization.
“While near-term volatility, including disruptions in the Arabian Gulf and the Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand over the medium to long term,” the UAE added inthe statement posted to the websiteof its state-run news agency.
JUST IN: 🇦🇪 UAE to officially exit OPEC and OPEC+ after 59 years.
The UAE has worked under OPEC and OPEC for 57 years. While the Gulf state did not clearly explain its decision, some attribute the UAE leaving to it being target of missile and drone attacks for weeks by fellow OPEC member Iran. Tehran’s attacks on shipping in the Strait of Hormuz has also severely constrained the UAE’s ability to export oil, threatening the foundation of its economy.
“We reaffirm our appreciation for the efforts of both OPEC and the OPEC+ alliance and wish them success,” the UAE energy ministry said Tuesday in a statement. The ministry added that it remains committed to market stability and will continue to cooperate with producers and consumers to that end, and its departure from OPEC will give the UAE more flexibility to respond to market dynamics.
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The oil market has been in extreme flux the last few months due to the ongoing war efforts in Iran. With the Strait of Hormuz’s closing still up in the air and negotiations with the US continuing, oil prices are booming globally. The price of U.S. crude oil surpassed $100 per barrel for the first time since April 10, after peace talks with Iran failed to show meaningful progress. Furthermore, some countries are running low on their supply for fuel and need to look elsewhere. The strait is one of the most crucial transport points for oil ships in the world.
Source: Watcher Guru
