UAE explains withdrawal from OPEC is an economic strategy, not a political one.

The UAE has firmly stated that its decision to withdraw from OPEC and OPEC+ is in line with its long-term economic strategy and vision for the benefit of the nation, emphasizing that there are no hidden political motives.

May 16, 2569 (CNBC) – The United Arab Emirates (UAE) has officially clarified that its decision to withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and its OPEC+ allies was a result of the country's economic vision and had no hidden political motives.

On Saturday, UAE Energy Minister Suhail Mohamed Al Mazrouei clarified the situation by posting on Twitter, stating that “this decision was made after a comprehensive assessment of domestic production policies and future potential, based solely on the national interests of the UAE, its responsibility as a reliable energy supplier, and a firm commitment to maintaining market stability.”

Earlier this month, the UAE shook the energy sector by announcing its withdrawal from OPEC, a group it had been a member of since 1967, even before the formation of the United Arab Emirates.

He insists there are no rifts within the alliance.

The UAE's Minister of Energy emphasized that "this decision was not based on any political considerations and does not reflect any conflict or rift between the United Arab Emirates and its allies."

He further added that ending this role "is a sovereign and strategic choice shaped by the country's long-term economic vision, the development of energy sector capabilities, and a firm commitment to global energy security."

A dramatic turn of events resulting from the effects of war.

Before the war, the UAE's oil production capacity was slightly over 3 million barrels per day, which was in line with the OPEC+ quota target. Abu Dhabi aimed to expand its production capacity to reach 4.9 million barrels per day.

However, due to the current war situation, the UAE's actual production has decreased to between 1.8 and 2.1 million barrels per day.

Jorge León, head of geopolitical analysis at the energy research firm Rystad Energy. In an interview with CNBC after the UAE announced its decision, it was stated that the UAE is the most influential member of OPEC after Saudi Arabia and one of the few countries (along with Saudi Arabia) with enough reserve production to influence prices and withstand supply shocks.

What is spare capacity?

This refers to reserve production capacity that is temporarily vacant but ready to be drilled and brought into the system quickly in the event of a severe crisis. Saudi Arabia and the UAE hold the majority of the world's reserve production capacity, totaling more than 4 million barrels per day, giving them significant influence on the market during times of global tension.

World oil prices surged in response to geopolitical expectations.

Global crude oil prices rose last Friday amid expectations that President Donald Trump was likely to refocus his attention on the stalled conflict with Iran following his summit with President Xi Jinping.

Brent crude oil (July contract): Rises more than 3% to close at $109.26 per barrel.

US WTI crude oil (June contract): surged more than 4% to close at $105.42 per barrel.

The price of Brent crude oil has surged by 74% year-to-date, but remains below its all-time high of $118 per barrel reached in late April.

Abu Dhabi is accelerating its new oil pipeline project to bypass the Strait of Hormuz.

In addition to the news of the withdrawal, Abu Dhabi authorities revealed on Friday that they are accelerating the construction of a new east-west oil pipeline project towards Fujairah to expand oil export capacity and to bypass the strategically important and high-risk Strait of Hormuz for shipping.

This second oil pipeline project is expected to be operational in 2570 and will double the export capacity of Abu Dhabi's national oil company (ADNOC).

The acceleration of this project comes as global energy supply continues to face significant pressure, with shipping lanes through the Strait of Hormuz severely restricted, coupled with repeated attacks on energy infrastructure and shipping vessels, which have become major obstacles to the UAE's ability to restore oil production to normal levels.

refer : cnbc.com