Day 60 of Middle East conflict

UAE quits OPEC during day 60 of Middle East conflict
Muhammad Asghar | GlobalBeat

The United Arab Emirates will exit OPEC and the OPEC+ alliance this week as regional fighting reaches its 60th day.

Energy Minister Suhail al-Mazrouei told reporters the withdrawal takes immediate effect, ending the UAE’s 55-year membership in the oil producers’ cartel.

The Gulf state produces 3 million barrels daily but has clashed with OPEC over production quotas that limited its expansion plans.

Al-Mazrouei announced the decision after an emergency cabinet meeting in Abu Dhabi.

“The UAE will coordinate energy policy independently while remaining a reliable supplier to global markets,” he said.

The withdrawal sends immediate shockwaves through energy markets during the region’s worst fighting since 1973. Brent crude jumped 4.2 percent to $92.40 within minutes of the announcement.

Saudi Energy Minister Prince Abdulaziz bin Salman expressed surprise at the timing. “This was not discussed at our last meeting,” he told state television.

The split weakens OPEC’s influence over global oil prices at a critical moment. The cartel controls 40 percent of world supply but will lose the UAE’s substantial reserves.

OPEC secretary-general Haitham al-Ghais issued a brief statement acknowledging the UAE’s departure. “We respect their decision and wish them well,” the statement said.

Analysts warned the move could trigger a production free-for-all among members. “Without quotas, several countries may pump more,” said Amrita Sen of Energy Aspects.

The timing links directly to broader Middle East fighting that began 60 days ago with an incident between Iranian and Israeli naval forces.

Border skirmishes escalated into missile exchanges involving Saudi Arabia, which has faced 20 Houthi drone attacks on its oil facilities.

The UAE itself came under fire twice in the past week. A missile struck near the port of Fujairah, while another hit an oil storage tank in Abu Dhabi.

Iraqi oil exports through the Strait of Hormuz dropped 30 percent due to shipping disruptions. Kuwait’s ports operate under heightened security.

Iran’s Revolutionary Guards seized two commercial vessels near the strait last Thursday. The incidents pushed insurers to raise premiums for Gulf shipping by 180 percent.

US President Donald Trump convened national security advisers after the UAE’s announcement. “We’re monitoring energy markets,” White House spokesman Brian Hughes said.

Trump administration officials worry about $100 oil during an election year. Gasoline prices already average $4.15 nationally, up from $3.60 in January.

China, the world’s largest oil importer, urged calm. Foreign ministry spokesman Lin Jian said Beijing “opposes actions that destabilize energy markets.”

Background

The UAE joined OPEC in 1967 as Abu Dhabi began developing its reserves. The federation of seven emirates holds 98 billion barrels of proven oil.

OPEC formed in 1960 as oil-producing states sought control over their resources. The UAE became the cartel’s third-largest Arab member after Saudi Arabia and Iraq.

Tensions over production quotas simmered for years. The UAE wanted to increase output from 3 million to 4 million barrels daily but faced limits set by the wider group.

Abu Dhabi’s national oil company invested $122 billion since 2021 to expand capacity. The investment looked wasted under OPEC restrictions.

The current Middle East conflict began when Israeli forces intercepted an Iranian weapons shipment bound for Syria. The operation killed 3 Iranian sailors.

Tehran responded with missile strikes on Israeli positions in the Golan Heights. Israel bombed Iranian bases in Syria, killing 15 Revolutionary Guards.

Saudi Arabia intercepted missiles aimed at Riyadh. The kingdom blamed Iran for arming Yemen’s Houthi rebels who claimed responsibility.

Egypt deployed troops to its border with Gaza after rockets struck Israeli towns. Jordan closed its airspace to military aircraft from any nation.

What’s Next

OPEC holds an emergency meeting Friday to discuss production policies without the UAE. Several members press for quota increases to capitalize on high prices.

US Energy Secretary Chris Wright travels to Riyadh this weekend for urgent talks. American officials want Saudi Arabia to boost output to replace disrupted Iranian exports.

The UAE’s energy minister heads to Delhi next week for separate discussions with Indian officials. India imports 800,000 UAE barrels daily.

European Union diplomats deliberate whether to pause oil sanctions on Iran if fighting continues. Current sanctions remove 1 million Iranian barrels from markets.

National security advisers from Gulf states plan talks in Muscat seeking regional de-escalation. Sultan Haitham of Oman offered to mediate between warring parties.

The coming week will test whether OPEC can maintain cohesion or faces further defections. Qatar’s energy minister called the UAE’s move “a wake-up call.”

Market analysts expect continued volatility. “Without OPEC unity, oil becomes a geopolitical weapon again,” said Martijn Rats of Morgan Stanley.