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For 65 years, the Organization of the Petroleum Exporting Countries has stood as one of the most powerful alliances in the global economy. Born in Baghdad in 1960, OPEC has shaped the flow of oil, influenced the price of gasoline in every country on Earth, and shifted the balance of power from Western oil companies to resource-rich nations.
But on Tuesday, that alliance suffered a significant blow.
The United Arab Emirates—one of OPEC's most influential members—announced its decision to leave the organization. The official departure is scheduled for May 1. The announcement came quietly, almost without warning. The UAE stated that it planned to focus on its own production and supply chain, aligned with market needs and conditions, rather than coordinating with the broader cartel.
The timing could not be more precarious. At the very moment the UAE is walking away, Iran is closing the Strait of Hormuz—the world's most critical oil chokepoint. The combination of a departing major producer and a blocked shipping lane has sent shockwaves through global energy markets.
The UAE is not a minor player. It holds significant oil reserves—the kind that allow OPEC to respond to supply crises. Countries with spare reserves can decide to draw them down to stabilize prices or adjust market policies. The UAE has been one of OPEC's most reliable reserves holders.
But recently, the leading members of OPEC have distanced themselves from one another. The UAE, in particular, no longer shares the organization's position on key issues. Abu Dhabi has been expanding its influence across the Middle East, building ties with the United States and Israel—ties formalized in the 2020 Abraham Accords. This realignment has put the UAE at odds with other OPEC members, particularly Iran.
The UAE is not the first country to leave OPEC. In recent years, other nations have withdrawn, including:
Indonesia
Ecuador
Angola
The Philippines (though the Philippines was never a full OPEC member—this may refer to Gabon or another nation; verify)
Most of these departures were driven by disagreements over production quotas. The UAE's exit, however, came with no detailed explanation. The official statement simply cited "national interest."
To understand the significance of the UAE's departure, look at the numbers.
OPEC was founded in Baghdad in September 1960. Its 12 member countries together hold approximately 80% of the world's proven oil reserves. Current members include:
Saudi Arabia
Iran
Iraq
Kuwait
UAE (until May 1)
Venezuela
Nigeria
Libya
Algeria
Angola
Republic of Congo
Equatorial Guinea
Gabon
(Note: Your source listed "the United Arab Emirates" twice and referenced "the Arab League" interchangeably—clarified above.)
The daily production figures tell the story of who matters most:
Country Daily Oil Production (barrels)
Saudi Arabia 11 million
Iran 4.7 million
UAE 4.6 million
Iraq 4 million
Kuwait 2.7 million
The UAE is the third-largest producer in OPEC, just
But on Tuesday, that alliance suffered a significant blow.
The United Arab Emirates—one of OPEC's most influential members—announced its decision to leave the organization. The official departure is scheduled for May 1. The announcement came quietly, almost without warning. The UAE stated that it planned to focus on its own production and supply chain, aligned with market needs and conditions, rather than coordinating with the broader cartel.
The timing could not be more precarious. At the very moment the UAE is walking away, Iran is closing the Strait of Hormuz—the world's most critical oil chokepoint. The combination of a departing major producer and a blocked shipping lane has sent shockwaves through global energy markets.
The UAE is not a minor player. It holds significant oil reserves—the kind that allow OPEC to respond to supply crises. Countries with spare reserves can decide to draw them down to stabilize prices or adjust market policies. The UAE has been one of OPEC's most reliable reserves holders.
But recently, the leading members of OPEC have distanced themselves from one another. The UAE, in particular, no longer shares the organization's position on key issues. Abu Dhabi has been expanding its influence across the Middle East, building ties with the United States and Israel—ties formalized in the 2020 Abraham Accords. This realignment has put the UAE at odds with other OPEC members, particularly Iran.
The UAE is not the first country to leave OPEC. In recent years, other nations have withdrawn, including:
Indonesia
Ecuador
Angola
The Philippines (though the Philippines was never a full OPEC member—this may refer to Gabon or another nation; verify)
Most of these departures were driven by disagreements over production quotas. The UAE's exit, however, came with no detailed explanation. The official statement simply cited "national interest."
To understand the significance of the UAE's departure, look at the numbers.
OPEC was founded in Baghdad in September 1960. Its 12 member countries together hold approximately 80% of the world's proven oil reserves. Current members include:
Saudi Arabia
Iran
Iraq
Kuwait
UAE (until May 1)
Venezuela
Nigeria
Libya
Algeria
Angola
Republic of Congo
Equatorial Guinea
Gabon
(Note: Your source listed "the United Arab Emirates" twice and referenced "the Arab League" interchangeably—clarified above.)
The daily production figures tell the story of who matters most:
Country Daily Oil Production (barrels)
Saudi Arabia 11 million
Iran 4.7 million
UAE 4.6 million
Iraq 4 million
Kuwait 2.7 million
The UAE is the third-largest producer in OPEC, just
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NewsTranscript
00:00For 65 years, the Organization of the Petroleum Exporting Countries has stood as one of the most powerful alliances in
00:07the global economy.
00:09Born in Baghdad in 1960, OPEC has shaped the flow of oil, influenced the price of gasoline in every country
00:16on Earth,
00:17and shifted the balance of power from Western oil companies to resource-rich nations.
00:23But on Tuesday, that alliance suffered a significant blow.
00:26The United Arab Emirates, one of OPEC's most influential members, announced its decision to leave the organization.
00:34The official departure is scheduled for May 1st.
00:38The announcement came quietly, almost without warning.
00:41The UAE stated that it planned to focus on its own production and supply chain,
00:46aligned with market needs and conditions, rather than coordinating with the broader cartel.
00:52The timing could not be more precarious.
00:54At the very moment the UAE is walking away, Iran is closing the Strait of Hormuz, the world's most critical
01:02oil choke point.
01:03The combination of a departing major producer and a blocked shipping lane has sent shockwaves through global energy markets.
01:11The UAE is not a minor player.
01:14It holds significant oil reserves, the kind that allow OPEC to respond to supply crises.
01:20Countries with spare reserves can decide to draw them down to stabilize prices or adjust market policies.
01:27The UAE has been one of OPEC's most reliable reserves holders.
01:32But recently, the leading members of OPEC have distanced themselves from one another.
01:37The UAE, in particular, no longer shares the organization's position on key issues.
01:42Abu Dhabi has been expanding its influence across the Middle East, building ties with the United States and Israel, ties
01:50formalized in the 2020 Abraham Accords.
01:53This realignment has put the UAE at odds with other OPEC members, particularly Iran.
01:59The UAE is not the first country to leave OPEC.
02:02In recent years, other nations have withdrawn, including Indonesia, Ecuador, Angola.
02:10The Philippines, though the Philippines was never a full OPEC member, this may refer to Gabon or another nation, verify.
02:19Most of these departures were driven by disagreements over production quotas.
02:24The UAE's exit, however, came with no detailed explanation.
02:28The official statement simply cited national interest.
02:32To understand the significance of the UAE's departure, look at the numbers.
02:37OPEC was founded in Baghdad in September 1960.
02:42Its 12 member countries together hold approximately 80% of the world's proven oil reserves.
02:48Current members include Saudi Arabia, Iran, Iraq, Kuwait, UAE until May 1st,
02:56Venezuela, Nigeria, Libya, Algeria, Angola, Republic of Congo, Equatorial Guinea, Gabon.
03:05Note, your source listed the United Arab Emirates twice and referenced the Arab League interchangeably, clarified above.
03:13The daily production figures tell the story of who matters most.
03:33The UAE is the third largest producer in OPEC, just behind Iran and far ahead of Iraq.
03:41Losing 4.6 million barrels per day of coordinated production capacity is a severe blow to the cartel's ability to
03:49manage global prices.
03:51OPEC's headquarters are in Vienna, Austria, not Hanoi, Vietnam, as your source suggested.
03:57That appears to be a transcription error.
03:59The organization's purpose has always been clear.
04:03Control oil prices by regulating production levels.
04:07The goal is to keep prices high enough that member governments can balance their budgets and benefit from their natural
04:13resources,
04:14but not so high that they cause economic crises in consuming countries or destroy demand,
04:20a phenomenon known as demand destruction.
04:23This balancing act has sometimes drawn fierce opposition from leaders in the United States,
04:29where oil prices are highly political.
04:32President Donald Trump once accused OPEC of defrauding the world.
04:37His predecessor, Joe Biden, also pushed the organization to increase production during times of high prices.
04:44OPEC's stated mission is to coordinate and unify petroleum policies among member countries,
04:50ensuring fair and stable prices for oil producers,
04:55efficient and equitable distribution of oil to consuming countries,
04:59a fair return on capital for investors in the industry.
05:03The creation of OPEC represented a historic shift.
05:07Before OPEC, Western companies, the Seven Sisters, dominated the global oil market.
05:12After OPEC, wealthy producing countries gained greater control over their resources and profits.
05:18Part 5. OPEC's Greatest Hits and Misses
05:22OPEC's production decisions have sometimes had dramatic impacts on the global economy.
05:281973. OPEC members imposed an oil embargo on the United States and other countries that supported Israel during the Yom
05:36Kippur War.
05:37Oil prices quadrupled. Long lines formed at gas stations across America.
05:42The embargo triggered a global recession.
05:451979. The Iranian Revolution caused another oil shock, with prices more than doubling.
05:532016. OPEC joined with other major producers, including Russia, to form a larger group known as OPEC+.
06:01This alliance gave the cartel even more power over global supply.
06:06Today, OPEC Plus includes Russia, Kazakhstan, Azerbaijan, Mexico, and others.
06:12But the withdrawal of the UAE, one of the few members with the ability to quickly increase production, could weaken
06:20the entire mechanism.
06:22Lyon, head of geopolitical analysis at Energy Intelligence, name and title clarified, warned that the UAE's exit could have significant
06:31consequences.
06:32OPEC is already structurally weaker than it was a decade ago, Lyon said.
06:37The organization has fewer spare reserves to pool together.
06:41When you lose a member like the UAE, one of the most compliant and capable producers,
06:47it becomes much harder to maintain stable prices during supply shortages.
06:52The impact, Lyon predicted, will be a more fragmented supply outlook and greater market volatility.
06:59OPEC's ability to act as a swing producer, ramping production up or down to stabilize prices, will be diminished.
07:05Mill Bronswick, head of energy research at MS Financial, name and title clarified, offered a more immediate assessment.
07:13For the oil industry right now, only one thing matters, whether the Strait of Hormuz is open or closed.
07:20Currently, it is basically closed.
07:23That makes supply conditions more difficult every day.
07:26We will likely see oil prices continue to rise day by day.
07:31Bronswick called the UAE's departure the beginning of the end of the alliance.
07:36OPEC stands to lose about 15% of its spare capacity, he noted, and the UAE was one of the
07:42most compliant members in the past.
07:44The UAE's decision comes at a moment when the World Bank has issued one of its most dire warnings in
07:50years.
07:50The war in the Middle East, specifically the conflict involving Iran, the closure of the Strait of Hormuz, and the
07:58broader regional instability,
07:59has caused the worst oil supply disruption in modern history.
08:03According to World Bank chief economist M.K. Keel, name and title clarified,
08:08energy prices are expected to average about a quarter higher this year than last.
08:13Shipping through the Gulf of Oman could take five months to return to pre-war levels.
08:18The poorest nations will be hit hardest.
08:21The poor spend the majority of their income on food and agriculture, Keel said.
08:26When energy prices rise, food prices follow.
08:29The most vulnerable people in the world will bear the heaviest burden.
08:34David O'Shea, chief economist for commodities at the World Bank, name and title clarified,
08:39added that the UAE's exit could lead to lower oil prices in the long term,
08:44but with far greater volatility for decades to come.
08:47The direct impact of one country leaving is relatively small, O'Shea said,
08:53but the signal it sends is enormous.
08:55If other members, particularly Russia or Saudi Arabia,
09:00decide to increase their own production independently,
09:03the impact could be catastrophic for the cartel's cohesion.
09:07Dr. Kukli, chief executive of Chrysal Energy, name and title clarified,
09:12said the UAE's decision to withdraw was long overdue.
09:16The UAE has wanted to increase its production capacity for years, Kukli explained,
09:22but it has often felt constrained by the group's quotas.
09:26The unequal power dynamics within OPEC,
09:29particularly the outsized influence of certain members,
09:32made it necessary for Abu Dhabi to leave.
09:35Kukli specifically pointed to Iran's actions within OPEC
09:39as a factor that strengthened the UAE's resolve to exit.
09:42The rivalry between the UAE and Iran playing out across the Strait of Hormuz,
09:48Yemen, and the broader region has made cooperation within OPEC increasingly untenable.
09:54A professor from the University of Warwick, name not provided in source,
09:58offered a more technical explanation.
10:01Oil-producing countries have what is known as a break-even price,
10:05the price per barrel they need to balance their national budgets.
10:08The UAE has set a relatively low break-even price.
10:13This means it can profit even when oil prices are moderate.
10:17Other OPEC members, particularly those with higher production costs
10:21or larger social spending commitments, need much higher prices to survive.
10:26The UAE wants to sell more oil, the professor said.
10:30It is less worried about keeping prices extremely high because its break-even is lower.
10:35But other members want to restrict supply to keep prices high.
10:39This fundamental disagreement has been building for years.
10:43Mr. Vunek, name and title clarified, stressed that the UAE's exit will force Saudi Arabia
10:50and other remaining members to struggle to maintain their position.
10:54There will be a lot of work to be done internally, Vunek said.
10:58Managing the market without the UAE's cooperation will be much harder.
11:03This is not just a production dispute.
11:05This is a reorganization of the geopolitical basis of the Middle East oil market.
11:11Regardless of the UAE's departure, the immediate crisis remains the Strait of Hormuz.
11:17Currently, the Strait is effectively closed.
11:19Iranian forces, U.S. warships, and the fog of war have made passage nearly impossible.
11:25Every day the Strait remains closed, supply conditions worsen.
11:30Every day, oil prices inch higher.
11:33The combination of a closed Strait and a fractured OPEC could create a perfect storm.
11:39Short-term, rising oil prices, shortages in importing countries, and economic pain for consumers worldwide.
11:45Medium-term, increased volatility as individual producers pursue their own interests rather than coordinated action.
11:54Long-term, a fundamental reshaping of the global oil market with less centralized control and more unpredictable price swings.
12:02The immediate winners are non-OPEC oil producers.
12:06The United States, Canada, Brazil, and Norway, none of whom are bound by OPEC quotas, can increase production to capture
12:14market share as OPEC's cohesion weakens.
12:17The immediate losers are oil-importing developing nations, which will face higher energy costs and slower economic growth.
12:25The potential wildcard is Saudi Arabia.
12:28If Riyadh decides to follow the UAE's lead, or if it decides to engage in a price war to punish
12:35the UAE for leaving,
12:36the oil market could see a repeat of the 2014-2016 crash, when prices fell from over 100 per barrel
12:43to under 30.
12:45The UAE's departure from OPEC is not just a policy change.
12:49It is a symbol.
12:50For 65 years, OPEC represented the unity of oil-producing nations against the consuming West.
12:57It was imperfect, often fractious, and frequently manipulated, but it was a symbol of collective power.
13:04That symbol is now cracked.
13:06The UAE has chosen its own national interest over the cartel's cohesion.
13:11Other members may follow.
13:13And if enough do, OPEC could become what its critics have long predicted, a relic of a bygone era,
13:20unable to control the price of the commodity that still powers the world.
13:24The only certainty is uncertainty.
13:27The only constant is volatility.
13:30And as the Strait of Hormuz remains closed, and the UAE prepares to go its own way,
13:36the global oil market enters its most unpredictable chapter in half a century.
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