LONDON — Oil prices surged on Tuesday after the United Arab Emirates announced its decision to exit OPEC and the OPEC+ alliance, effective May 1, dealers and analysts said.
Brent crude, the global benchmark, rose more than 2 percent to trade above $111 per barrel during the session, while U.S. West Texas Intermediate climbed about 3 percent to near $100 a barrel, according to market data. The gains came as the UAE's move added to uncertainty in global energy markets already strained by the ongoing conflict involving Iran, which has disrupted shipping through the Strait of Hormuz.
The UAE, one of the world's major oil producers and a member of OPEC since 1967, cited a strategic review of its long-term energy policy and a desire for greater flexibility in output decisions. Energy Minister Suhail Mohamed al-Mazrouei described the exit as a policy choice aligned with national interests. “This is a policy decision,” he said in comments reported by state media and international outlets.
The announcement, carried by the UAE state news agency WAM on Tuesday, represents a significant shift for the oil producers' group. OPEC will be left with 11 members following the departure. The timing coincides with broader supply challenges in the Gulf region stemming from the Iran-related conflict, though the precise contribution of the UAE decision to Tuesday's price movement remained unclear.
Analysts noted that the UAE had previously expressed frustration with production quotas within the group. The country has ambitions to increase its output capacity in coming years. Details on how the exit will affect existing OPEC+ agreements or future coordination among producers were not immediately available.
Saudi Arabia, the de facto leader of OPEC, had no immediate public comment on the UAE's decision. Other members of the group also remained silent as of late Tuesday.
The price surge occurred against the backdrop of reduced oil flows through the Strait of Hormuz due to the regional conflict. Market participants are monitoring whether the UAE's move will lead to higher or more volatile production levels outside the cartel framework.
As of Tuesday evening, oil futures maintained gains but trading was volatile. No official reaction had been issued by major consuming nations or other non-OPEC producers.
The UAE government stated that it remains committed to overall market stability while pursuing an independent production strategy after May 1. Further details on planned output levels post-exit were not disclosed in the initial announcement.
The situation continues to develop, with industry observers expecting discussions on the implications at upcoming energy forums.
