UAE quits OPEC amid Iran crisis

The United Arab Emirates said on April 28 it will leave OPEC and OPEC+ on May 1, splitting from the Saudi-led oil alliance during the Iran war. (cnn.com) (bloomberg.com) The move ends nearly 60 years of UAE membership in OPEC and removes the group’s third-largest producer after Saudi Arabia and Iraq. (msn.com) (watcher.guru) OPEC’s own statements this year still listed the UAE among the eight OPEC+ countries managing voluntary supply cuts and a gradual 1.65 million-barrel-a-day unwind. (opec.org 1) (opec.org 2) Hours after the UAE announcement, a Japan-linked supertanker called the Idemitsu Maru appeared to sail through the Strait of Hormuz carrying 2 million barrels of Saudi crude. It had been sitting northwest of Abu Dhabi for more than a week. (bloomberg.com) Bloomberg reported the tanker used a Tehran-approved northern route near Qeshm and Larak islands, making it the first apparent Japanese-linked oil-carrier exit since the war began. (bloomberg.com) That passage did not mean Hormuz had reopened. Bloomberg reported on April 25 that transits through the strait had become “virtually impossible” as the United States blocked Iran-linked shipping and Tehran used gunboats to choke traffic. (bloomberg.com) Oil still jumped. U.S. crude rose above $100 a barrel for the first time since April 10, and Reuters reported the UAE exit trimmed some gains because traders saw a weaker OPEC over time. (nbcnews.com) (globalbankingandfinance.com) The UAE has argued for years that its growing production capacity deserved a higher baseline inside OPEC+, a dispute that flared publicly in 2021 before a compromise was reached. Tuesday’s break suggests Abu Dhabi no longer wants cartel limits to govern its spare capacity. (cnn.com) (bloomberg.com) The immediate problem is that extra UAE barrels are hard to move while Hormuz remains constrained. The longer problem is that OPEC has now lost a core Gulf member just as war has upended one of the world’s main oil chokepoints. (cnn.com) (bloomberg.com) May 1 is now the next date traders will watch. By then, the UAE’s exit becomes official, and the market will know whether the Idemitsu Maru was a one-off exception or the start of limited traffic through Hormuz. (bloomberg.com 1) (bloomberg.com 2)