- United Arab Emirates will leave OPEC and OPEC+ effective May 1
- UAE exit signals potential fragmentation within the traditionally united group
- Departure challenges Gulf oil exports via the crucial Strait of Hormuz
The United Arab Emirates has announced its exit from both OPEC and OPEC+, dealing a significant setback to the oil producers' bloc and its de facto leader, Saudi Arabia, at a time when the ongoing Iran war has triggered a historic energy shock and rattled the global economy, Reuters reported. The exit will come into effect from May 1.
The departure of the UAE, long considered a key member of OPEC, raises concerns over potential fragmentation within the group, which has traditionally projected unity despite differences over geopolitics and production quotas.
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The development comes as Gulf producers face mounting challenges in exporting crude via the Strait of Hormuz, a critical passage through which roughly one-fifth of global oil and LNG supplies transit.
Reuters reported that the move is also being viewed as a strategic win for Donald Trump, who has repeatedly criticised OPEC for inflating oil prices.
Trump has previously said the group is ripping off the rest of the world and linked US military support for Gulf nations to oil pricing, arguing that while Washington ensures their security, they exploit this by imposing high oil prices.
Tensions appear to have escalated following criticism from UAE officials over what they described as an inadequate regional response to Iranian attacks.
ALSO READ: A New Opening? Iran FM Says Considering Trump Team's 'Request' For Talks
According to Reuters, Anwar Gargash, diplomatic adviser to the UAE president, flagged concerns at the Gulf Influencers Forum.
“The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically,” Gargash said.
“I expect this weak stance from the Arab League and I am not surprised by it, but I haven't expected it from the (Gulf) Cooperation Council and I am surprised by it.”
The exit comes at a time when crude oil prices have topped the $110 per barrel-mark, with analysts fearing that the $120 price tag could be within reach.
ALSO READ: Brent Crude Crosses $108 As US Weighs Iran Proposal, Hormuz Stays Shut
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