The UAE wants to get out of OPEC

The coming year will be an eventful one for the UAE. The Gulf country wants to pump more oil, cement its position as a major destination in the region, and cause a sensation when Dubai hosts the COP28 climate conference in November. This may push President Mohammed bin Zayed Al Nahyan to reconsider one of his country’s oldest alliances.

The UAE has been a key member of the Organization of the Petroleum Exporting Countries for 55 of the 62 years since the club’s existence. But the current OPEC policy is far from satisfying the country’s ambition. As it is only allowed to pump 3 million barrels per day, which is far below its capacity of 4 million barrels. It is even less than the daily production target of 5 million barrels that the Abu Dhabi National Oil Company recently introduced through 2027 from 2030.

The UAE has been angry at OPEC restrictions before, in 2020 and 2021. OPEC’s current production cuts are supposed to offset risks of lower oil prices as the US and Europe enter recession.

The Emirates could change that by exiting OPEC, as Qatar did in 2019. Then the UAE will get revenue from being able to pump whatever it wants, while also benefiting from the support of the United States and its allies. This would help secure Abu Dhabi and Dubai as key Gulf destinations for capital and headquarters for Western companies.

Written by rfrfx

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