UAE Exits OAPEC

The United Arab Emirates (UAE) has formally withdrawn from the Organization of Arab Petroleum Exporting Countries (OAPEC) after its significant decision to leave OPEC and the wider OPEC+ group.

OAPEC acknowledged the UAE's contributions during its membership and expressed its ongoing commitment to enhance cooperation among member countries in advancing their shared interests through strategic programs and initiatives.

Since OAPEC does not enforce production quotas, this exit is not related to immediate supply restrictions. Abu Dhabi is distancing itself from a regional framework it no longer deems necessary as it works to increase its output capacity and manage its export policies independently.

This departure follows tensions with Saudi Arabia and frustration over the group's response to Iranian attacks during the conflict. Abu Dhabi faced direct security threats while still adhering to cartel policies outside its control.

In a statement on Monday, UAE Energy Minister Suhail Mohamed al-Mazrouei informed Reuters that the decision aligns with national economic interests.

"This policy decision was made after a thorough examination of current and future production policies," Mazrouei explained.

Monica Malik, chief economist at ADCB, stated that the UAE's exit from the cartel would benefit consumers, noting, "This opens the door for the UAE to increase its global market share once the geopolitical situation stabilizes."

The state-run ADNOC is working to boost its capacity to 5 million barrels per day, with plans to achieve this by 2027, a goal previously hampered by OPEC quotas.

The UAE’s long-term economic vision includes a $150 billion capital expenditure program via ADNOC to accelerate energy growth. Remaining in OPEC would have required it to stick to production quotas that limited its output potential.

With global oil demand expected to peak, the UAE seeks to monetize its reserves quickly before the world shifts further toward renewable energy. Nevertheless, the UAE's economy is increasingly diversified, with non-oil sectors contributing over 70% of its GDP. Its sovereign wealth funds collectively manage almost $3 trillion in assets, providing financial stability that enables it to prioritize global economic growth over high oil prices.