SOUTH BEND, Ind. -- The United Arab Emirates announced it is leaving the Organization of Petroleum Exporting Countries, or OPEC.
Jaime Brito is the Executive Director of Refining and Oil Markets at Dow Jones Energy. He says the OPEC cartel defines production limits and tries to make movements to steer oil prices, though he says it doesn't have the power to actually control prices.
Brito says the UAE has invited significant international investment in its country over the past 20 years. Now, it has the capacity to produce more and give returns to those investors without the output limits set by OPEC.
“So, their strategy, in my opinion, is not necessarily aimed to provide this news during the war. I think at some moment during 2026, with or without war, they would have announced that. And it just came to happen in the very moment where the countries of the Gulf were gathering together in Saudi Arabia this week. So, in my opinion, it was a respect act saying upfront with the Saudis and the REST of the colleagues, we are leaving the cartel, and we're leaving because we want to make sure that we put national interest first of our regional interest,” said Brito
Brito says in his opinion, this was bound to happen. The UAE’s decision to leave also includes OPEC+, which is a larger group of other oil producers like Russia.
Now, Brito says the UAE will join the third group with countries like Canada, the U.S., and Argentina. ABC57’s Jordan Tolbert asked Brito what leaving OPEC means, in terms of the global oil market and gas/oil prices.
Brito says in the short term, there shouldn’t really be any difference, because he says no volume can come out of the Strait of Hormuz. Even though the UAE has a pipeline that bypasses the Strait, he says it's not safe.
“Now, towards the middle term, long term, after this Hormuz crisis is resolved. As I was saying, you know, we're talking about a country that is promising to add more volume into the market. So, in theory, the more supply you have, the more consumers will benefit of lower prices. Directionally, it tells you that crude prices could be lower than expected because of this additional volume from the Emirates,” said Brito.