Abu Dhabi, May 20. In a major jolt to the global energy world, the United Arab Emirates (UAE) has announced its departure from OPEC, the Organization of the Petroleum Exporting Countries — ending nearly six decades of membership for one of the bloc's largest producers.
Why the exit
The UAE has for years chafed at its production quota within OPEC. The country has invested heavily in expanding its output capacity and wants to grow market share, an ambition that OPEC's production-cut policy kept in check. Analysts say winning full autonomy over its energy policy is the central reason behind the move.
Impact on oil markets
Crude prices swung soon after the announcement as traders weighed the supply uncertainty. Free of quota obligations, the UAE could pump more oil into the market, which may pressure prices in the short term. The longer-term direction, however, will hinge on how the remaining OPEC members — Saudi Arabia in particular — respond.