The UAE doesn’t figure in the list of first five oil producing states, but it has the world’s sixth largest reserve of crude oil, around 111 billion barrels.
This is important as the UAE has declared it will leave the OPEC (Organisation of Petroleum Exporting Countries) and OPEC+ on May 1 and chart an independent course. The UAE’s entry into OPEC dates back to 1967.
The Guardian quoted the UAE Energy Ministry as saying that “Leaving Opec will give it greater flexibility”.
The country’s state-run WAM Agency said “This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets.
“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.”
It’s interesting to note that India’s NSA Ajit Doval was in Abu Dhabi over the weekend where he called on President Sheikh Mohammad bin Zayed. Oil industry experts here say there could be a major ramp up in oil and gas production over the next couple of years with bulk of LNG exports going to India.
Reports indicated the decision to leave may have been triggered by growing differences with Saudi Arabia on economic and geopolitical issues including their respective positions in the Yemen civil war.
The UAE, which has suffered repeated drone and missile strikes by Iran, has been very critical of its fellow Arab states for not doing enough to protect it.
Al Jazeera reports that Anwar Gargash, the diplomatic adviser for the UAE president, said on Monday that “The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically.
“I expect this weak stance from the Arab League and I am not surprised by it, but I haven’t expected it from the [Gulf] Cooperation Council and I am surprised by it,” he said.
Among those likely to be pleased with the UAE’s decision is President Trump, who has accused OPEC of “ripping off the rest of the world” by increasing oil prices. He also linked American military support for the Gulf with oil prices, saying that while his country defends OPEC members, they “exploit this by imposing high oil prices”.
