The UAE's decision to withdraw from Opec is “purely a policy move” aimed at preparing the country for the future, Suhail Al Mazrouei, the Minister of Energy and Infrastructure, told The National on Tuesday.
The world's seventh-largest producer of oil announced on Tuesday that it will withdraw from Opec after more than five decades, with the decision taking effect on May 1.
“The timing now is perfect […] because, one, it's a time where it's not going to impact the price, or the impact is going to be minimal on all of the producers, especially our friends” in Opec+, Mr Mazrouei explained.
“Timing is right also from the consumer's point of view because, after depleting huge resources from the strategic reserve, the world will need much, much more production of energy, whether it's crude or products,” he added.
The announcement came as Opec prepared to meet in Vienna on Wednesday. The UAE will also exit its terms and obligations under the broader Opec+ alliance, which includes non-Opec members led by Russia.
“This is a wise, carefully taken policy decision that has no political connotations to it. This is purely to ensure that we are ready for the future,” Mr Al Mazrouei said.
“This is a purely policy move. It's a decision that was taken after a long-term strategic and economic vision and evolution of our energy profile.
“Taking a decision solely is definitely faster than taking a decision among groups.”
Independence from Opec is set to give the UAE, which accounts for roughly 4 per cent of global oil production, more flexibility and responsiveness in managing the oil market, particularly in light of the widespread energy supply collapse from the Iran war.
It is also part of a national plan focused on limiting the country's dependence on any single bloc and replacing it with strategic autonomy that aligns with its ambitious, diversified agenda.
“What we did during all of those years is nothing but being a model of an exemplary member,” Mr Al Mazrouei said.
“Now, moving forward, the world is changing, moving forward, our role in the world is changing, we are becoming an active investor in this domain, and we are also becoming a supplier and a major supplier of many products to the world.”
The UAE produced 3.4 million barrels per day of oil before the start of the Iran war. However, following the closure of Hormuz, the country’s output slumped 44 per cent to 1.9 million bpd in March. Its production capacity, defined as the maximum sustainable rate at which a country can maintain crude output over a period of time, is currently 4.85 million bpd.
Asked whether the UAE intends to raise capacity to 5 million bpd by 2027, Mr Al Mazrouei said: “It is possible”. He added, however, that the Emirates will act as a “responsible” producer.
“We will produce what the world demands from us and from our codes. Our code is one of the cleanest codes in the world in terms of carbon intensity,” he affirmed.
“We're not going to be super fast or super agile and doing something that is counterproductive to the balance of the supply and demand.”
Abu Dhabi was an early member of Opec, having joined the exporters’ group in 1967, four years before the founding of the UAE. In coalition with other key Gulf producers, Saudi Arabia and Kuwait, the UAE was instrumental in the supply of oil from the Middle East, which accounts for 30 per cent of the world’s production.
Qatar left Opec in 2019, saying that its position as a leading gas producer made its membership of the group irrelevant. Two other Gulf countries – Bahrain and Oman – remain outside of Opec but are aligned with the group’s supply management efforts.
“Are we going to raise the production tomorrow? No, because we are still constrained like the others with the closure of the Strait of Hormuz. But timing-wise, it can't be better than this time, where it has a minimum impact on all of the producers,” said the minister.
