São Paulo – The United Arab Emirates announced on Tuesday (28) that it will leave the Organization of the Petroleum Exporting Countries (OPEC) as of May 1. The decision reflects the Gulf country’s long-term strategic and economic vision and also increases its flexibility to “respond to market dynamics,” UAE state news agency WAM reported.
In the WAM statement, the UAE says that, although the current conflict in the Middle East has caused volatility and supply disruptions, there is, in the medium and long term, a trend toward rising global energy demand. The country has been among those affected by the conflict involving the United States and Israel against Iran. In addition to facing retaliatory attacks from the Persian country, the UAE—like its Gulf neighbors—has been unable to move output that passes through the Strait of Hormuz.
Commodity prices rose on Tuesday. By early afternoon, the barrel of Brent crude, the global benchmark, was quoted at USD 111.24, up 2.8%, while WTI, the U.S. benchmark, rose 3.6% to USD 99.89. Data from the OPEC indicate that the UAE holds one of the world’s largest oil reserves, estimated at 113 billion barrels. In its statement, the country said it has been part of OPEC since 1967, when it was still the Emirate of Abu Dhabi, and maintained its membership after becoming the UAE in 1971. The organization includes, among others, Saudi Arabia, Algeria, Iran, Iraq, Kuwait, and Venezuela.
“The UAE is a trusted producer of some of the world’s most cost-competitive and lower-carbon barrels, which will play an important role in supporting global growth and emissions reduction. Following its exit, the UAE will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions,” the WAM statement said.
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Translated by Guilherme Miranda
