The UAE has taken a significant and unexpected step by announcing its withdrawal from both OPEC and the broader OPEC+ alliance, effective May 1.
This move marks a notable turning point in regional and global energy policy.
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The decision to cut free from the supply constraints of OPEC and OPEC+ is not just about the price of crude.This goes beyond oil, because the UAE has moved its base of wealth beyond depending just on oil.
The finances of the UAE are tied to the global economy, not the price of crude. Abu Dhabi manages ashuge portfolio of foreignassets depending on stable global markets with open trade routes.
The UAE state-linked investment schemes include the Abu Dhabi Investment Authority, Mubadala, ADQ, and others with roughly $1.7 trillion in assets by late 2024.
Companies dealing in utilities, energy, food and agriculture, transport, healthcare, logistics and financial services are the backbone of the wealth. Additionally, ports, airlines, food systems, hospitals and power networks are the internal organs of the body of wealth.
With the UAE deeply invested in Artificial Intelligence (AI) and semiconductor chips, the ties to the price of a barrel is lessened.
U.S.President Donald Trumpwelcomed the decision, describing it as “a great move” that could ultimately contribute to lowering oil and gas prices, as well as the cost of related goods. He also suggested that OPEC faces structural challenges that could be exacerbated by the UAE’s departure.
Source: Global Research
