UAE considered leaving OPEC over three years, presidential adviser says

DUBAI: The UAE’s decision to leave OPEC was three years in the making and is based on its view the world is near the “autumn of the hydrocarbon age”, meaning the country needs to maximise oil revenues while it can, a senior adviser to the president said.

The UAE ended its nearly 60-year membership of the Organization of the Petroleum Exporting Countries on May 1.

In the immediate term, the decision is unlikely to affect the market because of Iran’s effective closure of the Strait of Hormuz, but it could have a major impact on OPEC’s control over supplies when oil flows normalise.

Anwar Gargash, adviser to UAE President Sheikh Mohamed bin Zayed Al Nahyan, said the country’s exit was chiefly because its OPEC production quotas kept output well below capacity.

“We see that we are close to the sort of autumn of the hydrocarbon age,” he added. “And as a result, if you have the ability to produce and generate income and use that income in other investments, that’s what you should do.”

UAE says OPEC, OPEC+ exit was sovereign strategic decision, not political move

The UAE’s production capacity is 4.85 million barrels per day. It plans to raise it to 5 million bpd by 2027. Just before its exit from OPEC and the wider OPEC+ group, which brings in other oil producers led by Russia, its production target was closer to 3.5 million bpd.

ADNOC CEO Sultan al-Jaber, speaking on Wednesday, said the UAE would continue to be a responsible, stabilising force in energy markets.

Formerly allies, Saudi Arabia and the UAE have in recent years become rivals, disagreeing not just on oil policy, but on regional geopolitics and on attracting foreign talent and capital.

The tensions burst into public view at the turn of the year when fighting broke out in Yemen between opposing factions supported by each side.