The UAE's announcement to leave OPEC moderated the rise in oil prices
United Arab Emirates announced that they were leaving OPEC, the cartel of major producers OIL, which represents a strong blow to the other members of this organization at the moment of the great energy crisis caused by the war with Iran.
The loss of the UAE, a longtime member of OPEC, could weaken the organization, which has usually sought to show unity despite internal disagreements over geopolitics and production quotas, Reuters writes.
UAE Energy Minister Suhail Mohammed al-Mazrouei told Reuters the decision was made after careful consideration of energy strategies.
Asked if the UAE was consulted Saudi Arabia, the de facto leader of OPEC, said the UAE had not raised the issue with any other country.
"This is a political decision, made after careful consideration of current and future policies regarding production levels," the energy minister said.
The UAE announcement moderated the rise in oil prices. OPEC recently made a decision to limit the amount of oil production, which keeps the prices of this energy at a high level, so the decision of the UAE to withdraw from this organization opens the possibility for the Emirates to increase their oil production above the quantities agreed in OPEC, which would mitigate the energy shock and potentially provide themselves with higher incomes at a time when they are facing large losses in the tourism sector.
Mazrouei said the UAE's decision to leave OPEC as of May 1 will not have a major impact on the market due to restrictions on oil transportation in the Strait of Hormuz, which is virtually closed.
OPEC, together with Russia with which this organization is known as OPEC+, until before the Iran war, it controlled almost half of the world's oil production, and the Emirates itself was the fourth largest producer in that organization.
The International Energy Agency said OPEC+'s share of global oil production fell to 44 percent in March from about 48 percent in February. It is likely to fall further in April as production shutdowns intensify.
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