The United Arab Emirates (UAE) is quitting the Opec and Opec+ groups of major oil producing nations next month after nearly 60 years of membership.
The UAE said its decision would help it meet growing global energy demand in the long term after recent investments to boost its production capacity.
It is seen as a blow to the cartel, with one analyst describing the exit as “the beginning of the end of Opec”.
The Gulf state’s energy minister said being a country with no obligation under the groups would give it more flexibility.
Opec was formed in 1960 by five countries – Iran, Iraq, Kuwait, Saudi Arabia and Venezuela – and its aim has been to co-ordinate production to provide steady revenue for its members.
The number of countries in the cartel has fluctuated over the years, but in addition to the five founding members it also includes Algeria, Equatorial Guinea, Gabon, Libya, Nigeria and the Republic of the Congo.
The UAE joined in 1967, and its departure will leave the cartel with 11 members. There are an additional 10 non-Opec members in the wider Opec+ alliance.
Saul Kavonic, head of energy research at MST Financial, said it was “the beginning of the end of Opec”.
“With the UAE leaving, Opec loses about 15% of its capacity and one of its most compliant members.”
The UAE’s decision came as the World Bank warned the war in the Middle East has caused the biggest loss of oil supply on record.
Credit: bbc.com
