The United Arab Emirates announced on Tuesday that it would withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and OPEC+, dealing a heavy blow to the oil export organization and its actual leader Saudi Arabia. Currently, the Iran war has triggered a historic energy shock and destabilized the global economy.
As a long-time OPEC member, the stunning exit of the UAE could cause disorganization and weaken its power. Although the group is divided internally on issues ranging from geopolitics to production quotas, it generally strives to project a show of unity.
OPEC’s Gulf oil producers already have difficulty transporting exports through the Strait of Hormuz due to Iranian threats and attacks on ships. The strait is a narrow chokepoint between Iran and Oman, through which a fifth of the world's crude oil and liquefied natural gas normally passes.
But the UAE’s withdrawal from OPEC is a major victory for US President Trump. Trump has accused the group of "extorting the rest of the world" by raising oil prices.
Trump also linked U.S. military support to the Gulf region to oil prices, saying that when the United States defends OPEC members, these countries "take advantage of this by setting high oil prices."
The UAE is a regional business hub and one of Washington’s most important allies. The move comes after the UAE criticized other Arab countries for not doing enough to protect it from repeated attacks by Iran during the war.
Anwar Gargash, the diplomatic adviser to the UAE president, criticized the Arab and Gulf states' response to the Iranian attack at a panel of the Gulf Influencers Forum on Monday.
Gargash said: "The GCC countries support each other logistically, but politically and militarily, I think their position is at its weakest level in history."
He said: "I expected the Arab League to take such a weak position and was not surprised, but I did not expect the same for the GCC and I was surprised."