Listen to this article:

Dubai: The United Arab Emirates announced Tuesday (April 28) that it will leave OPEC effective May 1, stripping the oil cartel of one of its largest producers and further weakening its leverage over global oil supplies and prices.

The UAE’s decision had been rumored as a possibility for some time, as it pushed back in recent years against OPEC production quotas it felt had been too low – meaning it wasn’t able to sell as much oil to the world as it had wanted.

“Having invested heavily in expanding energy production capacity in recent years, the bigger picture is that the UAE has been itching to pump more oil,” Capital Economics wrote in an analysis. “The ties binding OPEC members together have loosened,” it said, particularly after Qatar withdrew from the cartel in 2019.

Regional politics are also likely at play. The UAE has had increasingly frosty relations with Saudi Arabia, OPEC’s largest producer, over political and economic matters in West Asia, even after both came under attack by fellow OPEC member Iran during the war.

The UAE’s withdrawal from OPEC won’t necessarily have any immediate effects in markets. That’s because world oil supplies are sharply constrained by the war in Iran, which in retaliation to the US-Israeli attacks on it has closed off the Strait of........

© The Wire