Closing summary
Time to recap:
The United Arab Emirates has quit the Opec oil cartel in a heavy blow to the group and its de facto leader, Saudi Arabia, amid the global energy shock caused by the Iran war.
The stunning loss of the UAE, a longstanding Opec member, could create disarray and weaken the group, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.
Opec Gulf producers have already been struggling to ship exports through the strait of Hormuz, a narrow choke point between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas normally passes, because of Iranian threats and attacks against vessels.
The UAE’s energy ministry said that the constraints on the strait meant the decision to leave would not have a huge effect on the market. Leaving Opec will give it greater “flexibility” and was in line with its “long-term strategic and economic vision”, he said.
Analysts said the decision would weaken Opec, and could lead to higher oil production by the UAE – once the disruption caused by the Iran war has ended.
The news came hours after BP reported its profits doubled in the first quarter of this year, thanks to an ‘exeptional’ performance by its oil trading division.
The surge in earnings was condemned by several campaign groups.
The UAE’s decision had been rumored as a possibility for some time, Associated Press points out.
The UAE has pushed back in recent years against OPEC production quotas it felt had been too low — meaning it wasn’t able to sell as much oil to the world as it had wanted.
Regional politics are also likely at play. The UAE has had increasingly frosty relations with Saudi Arabia, OPEC‘s largest producer, over political and economic matters in the Mideast, even after both came under attack by fellow OPEC member Iran during the war.
