Faisal Islam: Why the UAE's exit from Opec is a big deal
The UAE's abrupt exit from Opec marks a significant shift in global oil dynamics, as the country seeks to maximize its oil production beyond Opec quotas and leverage its strategic infrastructure. With the second-highest spare capacity in Opec, the UAE's move challenges the cartel's cohesion amid regional tensions and evolving energy markets. The decision could trigger a potential price war, especially if Saudi Arabia responds aggressively to increased Emirati output. This development reflects broader trends of declining oil dependence and accelerating energy diversification worldwide.
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Faisal Islam: Why the UAE's exit from Opec is a big deal1 hour agoShareSaveAdd as preferred on GoogleFaisal IslamEconomics editorGetty ImagesIt is a very big deal that the United Arab Emirates (UAE) has announced its abrupt exit from Opec, the Organisation of Petroleum Exporting Countries. The Emiratis were members even before they became a nation state in 1971.Opec is the organisation of mainly Gulf oil exporters, which for many decades controlled the price of crude oil by decreasing or increasing production and allocating quotas across its membership. It had a vital role in 1970s oil crises, which in turn transformed global energy policy.While Opec production is dominated by Saudi Arabia, the UAE had the second highest spare production capacity.
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