In West Asia, making of a post-OPEC order

UAE's exit from the cartel reflects the new security architecture being built around Abu Dhabi. The choice for New Delhi is to be a participant in shaping the new order or be a price-taker once it is built

- Ausaf Sayeed

The United Arab Emirates (UAE) left the Organisation of the Petroleum Exporting Countries (OPEC) on May 1 ending a 59-year membership without consulting Riyadh, Moscow or anyone else.

The cartel’s most senior officials learned of the decision on the wires. The oil price barely moved. That, more than the announcement itself, is the story. In the age of US shale and a closed Strait of Hormuz, OPEC’s power to influence prices is no longer what it once was. Abu Dhabi has chosen to leave a grouping whose collective discipline has, for some time now, delivered diminishing returns to its most capable members.

The proximate reasons are well documented. Abu Dhabi has spent more than $150 billion to lift the capacity of the Abu Dhabi National Oil Company (ADNOC) to 4.85 million barrels a day (MMDb/d), with a publicly stated target of five million by 2027. Its OPEC+ baseline has kept it at roughly 3.2 MMb/d. The gap is both arithmetic and grievance: 2019 OPEC+ talks collapsed precisely because Riyadh refused to raise the UAE's baseline, and the dispute has festered since. UAE's energy minister Suhail al-Mazrouei has framed the exit as policy rather than politics, but the timing — mid-war, with Hormuz shut and the war premium dwarfing everything else — is itself the politics.