The Globe and Mail reports in its Wednesday, April 29, edition that the United Arab Emirate's sudden decision to leave OPEC and OPEC+ is a significant setback for the cartel. The Globe's guest columnist Rashid Husain Syed writes that as the third-largest OPEC oil producer, its spare capacity was only behind Saudi Arabia, making this exit particularly impactful at a critical time.
The Iran war remains unresolved, with Tehran and the United States blocking normal passage through the Strait of Hormuz. Concerns about oil demand destruction, supply security from Persian Gulf producers and the shift toward renewables were already influencing efforts to reduce dependency on Middle Eastern oil.
The decision of the UAE to part ways with OPEC and the OPEC+ weakens the groups further, and the Arab oil producers are losing some of their clout in the energy world.
The UAE has been striving to opt out of OPEC for some time now. In recent years, Angola, Ecuador, Indonesia and most importantly Qatar have left OPEC.
But none of their departure was as big a blow to the organization as the UAE's was. Qatar was not a big oil producer.
Qatar's strength is in gas. UAE's discontent with OPEC has been visible for some time now.
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