UAE says it will exit the OPEC, as US-Iran negotiations stall

The United Arab Emirates said on Tuesday it will leave OPEC on May 1. The move will strip the oil cartel of one of its largest producers, further weakening its leverage over global oil supplies and prices.

Rumors of the UAE’s decision have been around for some time. In recent years, it has pushed back against OPEC production quotas, which it felt had been too low. This meant that it wasn’t able to sell as much oil to the world as it had wanted.

“Having invested heavily in expanding energy production capacity in recent years, the bigger picture is that the UAE has been itching to pump more oil,” Capital Economics wrote in an analysis. “The ties binding OPEC members together have loosened,” it said, particularly after Qatar withdrew from the cartel in 2019.

Regional politics also played a likely role in the decision. The UAE has had increasingly frosty relations with Saudi Arabia, OPEC’s largest producer, over political and economic matters in the Mideast, even after both came under attack by fellow OPEC member Iran during the war.

Meanwhile, Iran made another proposal in the ongoing US-Iran negotiations. It offered to end its chokehold on the Strait of Hormuz and postpone discussions on the nuclear program if the U.S. lifts its blockade on the country and ends the war.

However, President Trump seems unlikely to accept the offer, which was passed to the Americans by Pakistan and would leave unresolved the disagreements that led the U.S. and Israel to go to war on Feb. 28.

U.S. Secretary of State Marco Rubio appeared to rule out any deal that excludes Iran’s nuclear program. “We can’t let them get away with it,” Rubio said in a Fox News interview Monday. “We have to ensure that any deal that is made, any agreement that is made, is one that definitively prevents them from sprinting towards a nuclear weapon at any point.”