Stories from Abu Dhabi · UAE

The UAE has announced a decision to exit OPEC and OPEC Plus. The decision may open new avenues for cooperation in clean energy and joint investments outside traditional frameworks. Analysts suggest this could make maintaining oil transport unity more difficult. Crude oil reference prices for Colombia reached 115 dollars, the highest level since 2022. The UAE said its decision-making dynamism and economic independence, stating it will not be bound by specific alliances or organizational decisions. Brent crude prices are trading around 114 US dollars amid market pressure following the announcement of the UAE leaving OPEC. Tensions in the Middle East continue to contribute to market losses. International oil prices rose nearly 3 percent due to shipping disruption risks in the Strait of Hormuz.

Oil markets have reacted to ongoing tensions between Saudi Arabia and the United Arab Emirates since the start of the war nine weeks ago. Oil prices have risen to between 150 and 160 dollars per barrel from previous levels of 80 to 90 dollars. The UK and EU depend on the Middle East for 50 percent of aviation fuel imports. Oil prices rose today with projections suggesting prices could reach between $150 and $180 per barrel. Fuel prices are expected to range between 80 and 90 dollars per barrel, potentially reaching 150 dollars. Fuel represents 20% to 25% of airline operating costs, and up to 40% in some cases. Any fuel price crisis will directly impact airline profits, ticket prices, and operational decisions. A Japanese ship successfully transited the Strait of Hormuz today, which the Japanese Ministry of Foreign Affairs called a positive development.

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The departure of the United Arab Emirates, the third largest member of APEC, has raised questions regarding the future of the organization. Emirati officials have signaled intentions regarding the decision.

The United Arab Emirates is continuously developing its resource portfolio both locally and internationally. The country aims to complement the role of other producers, including the OPEC group.

Abu Dhabi has announced plans to increase oil production to 5 million barrels per day by 2030. The move is expected to influence the impact of oil cartels on global markets. The country holds the world's sixth-largest crude oil reserves at 127 billion barrels. It also possesses the seventh-largest gas reserves, totaling 297 trillion cubic feet. This course is described as a consensus within the federation of emirates rather than the decision of a single individual. The move is reportedly linked to chronic tensions in relations with Saudi Arabia. This follows internal tensions where one member has reportedly bombed another, leading to claims that the organization's solidarity is a fiction. The shift in production dynamics is expected to impact the future of OPEC and OPEC-plus. The United Arab Emirates is looking to move away from production constraints to support economic recovery.

A diplomatic advisor to the UAE President, Agasch, criticized the Gulf Cooperation Council for providing only logical support rather than additional assistance during the current economic crisis. This volatility requires more expensive hedging and insurance measures. The expert suggested that OPEC's ability to speak with one voice previously helped stabilize the market. Expert Heike Buchter noted that extreme volatility in the oil market increases costs due to the necessity of hedging. Trump accused the group of overcharging the world by artificially inflating oil prices. The decision is reportedly based on national interest, according to Andrea Di Stefano, director of The Washi News. The UAE is moving to prioritize national interests over multilateral interests following perceived lack of support during recent conflict.

The UAE's ability to export through Fujairah remains limited due to the closure of the Strait of Hormuz. The announcement specifically targets payments related to transit through the strategic waterway. The warnings follow an incident involving a commercial vessel.

The UAE's Energy Minister described a recent production move as a pure policy change following a review of current and future production levels. Al-Mazrui noted the UAE did not consult with other OPEC countries before the surprise decision. The US, Canada, and Latin American nations are forming a Western hemisphere alliance with production levels nearly equaling OPEC. This shift is described as a major macro trend affecting global oil dynamics. Simonov noted that the UAE is declaring current quotas no longer apply to them. He suggested this move could trigger a chain reaction and potentially dismantle the alliance. However, he also noted that the UAE cannot currently withdraw all produced oil, even within the framework of quotas. UAE Minister of Energy and Infrastructure Suhail Al Mazrouei stated that the UAE may exit the OPEC alliance.

The United Arab Emirates' decision to exit OPEC Plus is expected to be welcomed by President Trump, according to reports from the Times. The group is also facing operational difficulties due to drone strikes on infrastructure. Before recent tensions in the Strait of Hormuz, the production share of the UAE and other OPEC nations exceeded 10 percent. Expert Haydar Uğur noted the UAE's role in OPEC policy, citing its position as the fifth largest in reserves and fourth in daily production capacity. The United Arab Emirates is considering an exit from OPEC, according to reports monitored by Business FM Russia. Bloomberg estimates the decision may have limited immediate market impact due to US-Iran tensions constraining Persian Gulf exports. However, Reuters suggests the move could lead to a long-term decline in oil prices.