What The UAE’s OPEC Breakup Actually Signifies

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In a move that should surprise no one who’s been paying attention to the shifting realities of global energy, the United Arab Emirates announced Tuesday it is withdrawing from both OPEC and the broader OPEC alliance, effective May 1.

After more than five decades of membership — first through Abu Dhabi in 1967 and then as the UAE since 1971 — the federation is done sacrificing production flexibility on the altar of cartel-managed scarcity. (RELATED: Uncle Sam Puts Price Tag On Foreign Trade Rip-Offs For First Time Ever)

The official statement was straightforward: The UAE has “made significant contributions and even greater sacrifices” for the collective good of OPEC and OPEC . Now, it’s time to prioritize “national interest” and its “commitment to our investors, customers, partners and global energy markets.” Going forward, Abu Dhabi will gradually ramp up output in line with actual demand and market conditions, while continuing to invest across the full energy spectrum.

This pragmatic energy policy decision is a rational move by a government acting in the national interests of its country. The UAE sits on some of the world’s lowest-cost, most efficient reserves. Why should this major producer tie its hands behind its back with artificial quotas when global demand........

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