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UAE Quits OPEC in Fallout from Iran War, Shifts Economic Focus

The United Arab Emirates announced its withdrawal from OPEC, effective Friday, citing its long-term strategic vision and evolving energy profile. The decision follows the Iran war, which damaged the UAE's energy production infrastructure and export capabilities. WAM stated the UAE will continue acting responsibly in global energy markets, bringing additional production gradually aligned with demand. The move comes as the UAE pursues economic diversification, including the "Operation 300bn" initiative to boost manufacturing and attract foreign investment.

Key Points: UAE Leaves OPEC Amid Iran War Fallout

  • UAE announces OPEC withdrawal effective Friday
  • Decision reflects long-term strategic vision and economic diversification
  • UAE was fourth-largest oil supplier to India in 2024
  • Move follows Iran war damage to energy infrastructure
3 min read

UAE to leave OPEC in fallout from Iran war (Lead)

UAE announces withdrawal from OPEC effective Friday, citing strategic vision and economic diversification. Move follows Iran war impact on energy infrastructure.

"This decision reflects the UAE's long-term strategic and economic vision and evolving energy profile. - WAM statement"

New York, April 28

The United Arab Emirates, one of the top exporters of oil to India, announced on Tuesday that it was leaving the Organisation of Petroleum Exporting Countries, in a fallout from the Iran war, a group that has wielded power over the world price of oil.​

The UAE announcement, made through the official Emirates News Agency, WAM, said that this decision reflects the UAE's long-term strategic and economic vision and evolving energy profile.​

The UAE withdrawal, which takes effect on Friday, reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets, the WAM statement said.​

WAM said that following its exit, the UAE will continue to act responsibly, bringing additional production to market gradually and in a measured manner, aligned with demand and market conditions.​

It added that 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.​

Last year, the UAE was the fourth- or fifth-largest oil supplier to India, depending on the source of the projections.​

It was worth $13.5 billion in 2024, according to United Nations statistics.​

The UAE is the fifth producer of petroleum products among the 12 members of the Organisation of Petroleum Exporting Countries, according to the organisation.​

But globally, it ranked eighth, according to the United States Energy Information Agency.​

The UAE's withdrawal comes as it tries to diversify its economy away from oil.​

WAM said that, according to the Organisation of Petroleum Exporting Countries' Monthly Oil Market Report for April, the UAE is pushing ahead with initiatives to diversify the economy, including "Operation 300bn," which aims to boost manufacturing, expand export markets, and attract foreign investment.​

The Organisation of Petroleum Exporting Countries, founded in 1967, exerted its power in 1973 after the Israel war, choking the world supply of petroleum and sending prices soaring in a period when Arab nations dominated the petroleum market.​

It sets export quotas for its members, and now the UAE will be free of the restriction as it seeks to rebuild after the Iran war, which hit its energy production infrastructure and its ability to export.​

However, the Organisation of Petroleum Exporting Countries has been eclipsed by the United States, Russia, and Canada, which now hold the three top spots as exporters, after the top-ranked Saudi Arabia and above the fifth-ranked UAE, according to Investopedia.​

The Organisation of Petroleum Exporting Countries' once-unilateral ability to set prices has eroded, even though it still exerts outsised influence on global oil prices through its export quotas.

- IANS

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Reader Comments

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Priya S
The UAE is smart to diversify. Relying only on oil is risky, especially post-war. Their 'Operation 300bn' sounds ambitious. India should take notes and accelerate our own renewable energy push. Petrol prices in India are already sky-high, this UAE move might give us some relief. 🇮🇳
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James A
OPEC's influence has been waning for years. With US and Russia as top producers now, this exit is symbolic more than anything. For India, our oil imports from UAE were worth $13.5 billion last year. As long as supply remains stable, I don't see a major impact. Just more noise in the energy wars.
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Vikram M
This is a direct consequence of the Iran war. UAE wants more autonomy to rebuild. As an Indian, I'm concerned about our energy security. We depend heavily on Gulf oil. The government should fast-track strategic petroleum reserves and invest in domestic renewables. Can't afford to be caught off-guard.
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Sarah B
Interesting times. OPEC is losing relevance, but UAE's exit could lead to more oil in the market, which might be good for consuming countries like India. However, the Iran war is a bigger worry. Any disruption in Gulf supplies and our economy will feel the heat. Hope our diplomats are working overtime.
K
Kavya N
UAE's exit makes strategic sense for them. But India must not take this lightly. We are the third largest oil consumer globally. We need to strengthen ties with UAE independently. Maybe negotiate a better deal for crude imports? Also, high time we reduce our dependence. Saubhagya scheme for solar rooftop? ❤️

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