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ISLAMABAD: UAE&rsquo;s OPEC exit ends a 58-year membership and challenges the group&rsquo;s unity, founded in 1960 to counter Western oil giants, OPEC later expanded into OPEC+ but now faces weaker control over supply and prices. On April 28, the UAE announced it would withdraw from both OPEC and OPEC+, effective May 1, ending its 58-year membership. Analysts say the move reflects Abu Dhabi&#39;s frustration with production quotas it felt were holding it back. Before the exit, the UAE contributed roughly 15% of total OPEC+ output. Experts cited by ABC News say it could now aim to increase production to 5 million barrels per day by 2027, up from its former quota of 3.4 million barrels per day. OPEC: The beginningBefore OPEC existed, global oil was controlled by the &quot;Seven Sisters&quot; &mdash; major Western companies including Exxon, Shell, BP, and Chevron&#39;s predecessors.&nbsp; They dominated production, pricing, and distribution, leaving oil-producing nations with little say over their own resources. In 1960, five countries; Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela founded the Organization of the Petroleum Exporting Countries in Baghdad to take back control over output, prices, and revenues. The UAE joined in 1967.&nbsp; Over the following decades, OPEC grew into a central force in global energy markets, especially after the oil shocks of the 1970s. Its influence gradually weakened, however, as the US, Russia, and others increased their own output.&nbsp; To compensate, OPEC formed the broader OPEC+ alliance with non-OPEC producers, most notably Russia, to better manage global supply. This cooperation helped the group enforce production cuts and stabilize prices.&nbsp; Today, OPEC has 12 members, with OPEC+ playing an increasingly important role alongside it. What the UAE departure meansThe departure carries real risks for OPEC.&nbsp; It could affect Saudi Arabia&#39;s leadership within the group and erode the unity that keeps quota agreements in place.&nbsp; If other members follow suit or exceed their own limits, OPEC+ could find it harder to control supply and support prices. HSBC noted, however, that the near-term market impact may be limited, partly due to disruptions around the Strait of Hormuz.&nbsp; In the longer term, though, a significant rise in UAE output could put downward pressure on prices: good news for consumers, but a challenge for OPEC&#39;s cohesion and influence.

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UAE’s OPEC exit ends a 58-year membership and challenges the group’s unity, founded in 1960 to counter Western oil giants, OPEC later expanded into OPEC+ but now faces weaker control over supply and prices.

Articles tagged with "Oil Politics"

UAE exits OPEC, signaling a new era for oil politics

UAE exits OPEC, signaling a new era for oil politics