The UAE’s Withdrawal from OPEC and OPEC+: Causes and Preconditions

This event was also noted by Maria Alexandrovna Shapor – an expert in the field of global economics and Associate Professor at the Department of International Business of the Financial University under the Government of the Russian Federation.

As is known, the UAE, which had been a member of the cartel since 1967, justified its decision to withdraw by revising its national production policy and protecting its interests amid instability in the Persian Gulf.

Shapor M.A., being an economist and expert in global economics and international trade, plans to analyze the presented situation and examine the actual state of affairs from the perspective of several aspects:

1. The actual causes and prerequisites of the decision to withdraw from the cartel.
2. The reaction of the global oil market to this decision by the Emirates and the related consequences for Russia’s budget revenues.

In the concluding part of her commentary on the causes and prerequisites of the UAE’s withdrawal from OPEC, Shapor M.A., a scholarly expert in global economics, notes that the prerequisites for the Emirates’ withdrawal from the oil cartel can most fully be described by taking into account the influence of the following factors on this decision:

1. The UAE’s investment strategy, associated with the blocking of the OPEC+ decision to increase production (up to 5 million barrels per day instead of 1.5 million barrels per day) – a volume that had received support within OPEC+.
2. Geopolitical contradictions related to the escalation of the conflict in Yemen and developments in Iran, which further strained relations with Saudi Arabia. At the same time, the Emirates did not receive support within the framework of the “Peninsula Shield” mechanism, which increased disappointment in regional partnership.
3. Governance flexibility, which comes down to the country’s desire to pursue an independent pricing and energy policy.