The UAE’s exit from OPEC marks a big blow to oil cartel’s price-setting power. Will Venezuela be next out the door?
The United Arab Emirates is leaving OPEC after nearly 60 years, marking a significant challenge to the cartel's cohesion and Saudi-led production controls. The UAE's decision stems from frustration over production quotas that limit its output despite having substantial spare capacity. This exit could shift global oil dynamics, potentially increasing UAE production and benefiting countries like the United States seeking lower energy prices.
- ▪The UAE is the world’s seventh-largest oil producer and has a sustainable production capacity of 4.85 million barrels per day.
- ▪Under OPEC quotas, the UAE’s production is capped at 3.4 million barrels per day, about 30% below its capacity.
- ▪The UAE cited national interest and a review of its production policy as reasons for leaving OPEC, effective May 1.
- ▪Tensions with Saudi Arabia and lack of regional military support during attacks on UAE infrastructure contributed to the decision to exit.
- ▪Former OPEC members like Angola and Ecuador also left due to restrictive production quotas limiting their revenue.
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Open this photo in gallery:The UAE has sustainable production capacity of 4.85 million barrels a day, but under OPEC, it’s capped at 3.4 million – 30 per cent below its capacity.Lisa Leutner/The Associated PressShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountThe incredible shrinking OPEC oil cartel shrank again on Tuesday when the United Arab Emirates called it quits after almost 60 years of membership. The exit of the world’s seventh-largest oil producer is a blow to OPEC and its taskmaster, Saudi Arabia, and a gift to U.S. President Donald Trump, who has long decried the group’s price-setting power.The UAE is leaving on May 1. It gave only nebulous reasons for waving goodbye.
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