UAE to exit OPEC for Boosting Financial Independence
The United Arab Emirates (UAE) is leaving Organization of the Petroleum Exporting Countries (OPEC) to secure financial independence amid rising regional pressures, a senior policy analyst told Al Jazeera.
The move follows years of disagreement between the Emirates and the oil-producing bloc, primarily driven by disagreements over production caps and quotas.
Caleb Jasso, a senior policy adviser at The Institute for Energy Research, said that geopolitical tensions played a significant role in the decision.
“Given that Iran is a founding member [of OPEC] and the UAE has taken a significant amount of the brunt of Iran’s attacks, there could be an underlying tone here,” Jasso said.
He added that the current regional conflict is “potentially the straw that broke the camel’s back for them to want to leave”.
By exiting the group, the UAE aims to capitalize on its massive natural resources.
The country currently holds more than 100 billion barrels of oil, ranking among the highest known reserves in the world.
“They also have some of the highest known reserves [of oil] in the world, north of 100 billion barrels, so unhooking themselves from the limitations of production caps is going to bode very well for them in the long term in terms of economic recovery from what is currently going on in the region,” Jasso told Al Jazeera.
The analyst noted that the transition will provide the UAE with the necessary capital to repair the impact of regional instability.
According to Jasso, leaving OPEC will help the UAE “rebuild infrastructure that has been damaged [from the war], as well as rebuilding the image of the UAE and Dubai specifically as a very safe and gem of the desert in the region”.
