UAE to withdraw from OPEC on May 1

CAIRO - The United Arab Emirates will withdraw from the Organization of the Petroleum Exporting Countries effective May 1, the state news agency WAM said on Tuesday.

The decision follows what officials described as a "comprehensive evaluation," including consideration of ongoing "disruptions" in the Gulf and the Strait of Hormuz.

The announcement comes a day before a scheduled OPEC meeting in Vienna.

"This decision reflects the UAE's long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets," the UAE said in the statement carried by WAM.

The exit is seen as a significant blow to OPEC and OPEC+, a coalition of oil-producing countries led, respectively, by Saudi Arabia and Russia, and which aims to stabilize prices and manage supply.

With the departure of one of its largest producers, the group's share of global oil markets -- and its ability to influence prices -- is expected to decline.

The move also highlights growing tensions between the UAE and Saudi Arabia, long-time allies that have increasingly competed for regional influence, including backing opposing sides in conflicts in Yemen and Sudan.

The move comes two months after the outbreak of the US-Israel war on Iran, during which the UAE faced major drone and missile attacks from Tehran, including on energy infrastructure.

The effective closure of the Strait of Hormuz has sharply curtailed the UAE's ability to export oil. Oil revenues have underpinned the UAE's economic growth and geopolitical influence since the 1960s.

While disruptions in the Strait of Hormuz are affecting shipments, the statement noted that medium- and long-term trends still point to rising global energy demand.

The UAE has been among the largest producers in OPEC. Before output declined due to the Iran war, it produced 3.4 million barrels per day in March - more than 16% of total OPEC output -- and is targeting production of 5 million barrels per day by 2027.

Debate over a potential exit from OPEC had been ongoing for several years. The Wall Street Journal reported in 2023 that internal discussions were already underway.

In 2019, regional neighbor Qatar left OPEC, citing its focus on natural gas as a reason membership was no longer necessary.

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