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From Editorial Desk

UAE has taken an unexpected decision to leave its membership of OPEC. It has cited greater freedom in supplying oil volumes to the world according to its increasing capacity, rather than following the regulated quota of OPEC, a group dominated by Saudi Arabia. UAE has said that leaving OPEC shall give it greater freedom in matters of oil supply.

Experts point out recent tiff between UAE and Saudi Arabia because of their conflicting interests in Yemen and in Sudan.

Since UAE is the 4th largest oil producer in West Asia, this is being remarked as the beginning of the end of OPEC. However, UAE is not the first country to leave the OPEC. Qatar, Ecuador, Angola and Indonesia have left the OPEC earlier.

Given the continued blockade of the Strait of Hormuz, UAE’s withdrawal may not have an immediate impact on the oil supply, as UAE depends heavily on Hormuz to pass its oil ships. However, in the long run, if and when Hormuz is opened, UAE’s autonomous supply of oil may affect the oil prices across the world.

Here, it must be remembered that Trump had threatened to impose his infamous tariffs in January, if West Asian countries didn’t bring down the oil prices. It’s another matter that his strikes on Iran led to the closure of the Strait of Hormuz and therefore, an oil crisis and rise in oil prices.

It remains to be seen how the UAE plays on the oil price field after leaving OPEC and how it affects the oil prices.