announcement on Tuesday that the Emirates<\/a>, a major oil producer, is leaving after more than 50 years of membership comes at a difficult moment for the organization. The United States and Israel are locked in a uneasy standoff with Iran, a founding member of OPEC that has effectively shut down much of the flow of oil and natural gas from the Persian Gulf. During the two-month war, Iran has also attacked its partners in the cartel.<\/p>\n\u201cThere\u2019s no way to underplay U.A.E.\u2019s departure,\u201d said Frank Fannon, who was an assistant secretary of state for energy resources in the first Trump administration. \u201cIt\u2019s part and parcel of a general shift. There\u2019s the lack of trust among members, particularly with one of them shooting at other members. It\u2019s a very big deal.\u201d<\/p>\n
For now, the chaos in global oil markets from the war with Iran and effective closure of the Strait of Hormuz, a crucial Persian Gulf shipping channel, is overshadowing the fallout from the Emirates\u2019 pending departure. Regardless of how many members OPEC has, the Gulf has become an unreliable energy supplier.<\/p>\n
Indeed, oil prices hardly budged in response to the Emirates\u2019 announcement.<\/p>\n
The longer-term consequences will become clearer if and when the strait reopens, allowing producers throughout the region to return to prewar production and export levels.<\/p>\n
Without the Emirates, the cartel\u2019s largest oil producers will be Saudi Arabia, Iraq and Iran. That is hardly anybody\u2019s idea of a chummy group.<\/p>\n
\u201cIt\u2019s pretty hard to envision how OPEC could continue to be a functioning organization for friendly collaboration, at least in the short term and maybe forever,\u201d said Amy Myers Jaffe, an energy consultant and the director of New York University\u2019s Energy, Climate Justice and Sustainability Lab.<\/p>\n
Others cautioned that OPEC had survived previous departures and found ways to adapt to changes in the geopolitics of oil.<\/p>\n
To make up for OPEC\u2019s reduced clout, Saudi Arabia, the cartel\u2019s de facto leader, has coordinated oil production with Russia in recent years through a group of eight countries called OPEC Plus.<\/p>\n
\u201cThe death of OPEC has been proclaimed many times before, and the withdrawal of a producer as important as the U.A.E. is certainly a large blow,\u201d said Jason Bordoff, the founding director of the Center on Global Energy Policy at Columbia University. \u201cBut I don\u2019t think we know enough yet to proclaim OPEC dead.\u201d<\/p>\n
Before OPEC formed in 1960, the international oil market was dominated by the \u201cSeven Sisters\u201d \u2014 multinational energy companies that would eventually, through name changes and mergers, become Shell, Chevron, Exxon Mobil and BP.<\/p>\n
Iran, Iraq, Kuwait, Saudi Arabia and Venezuela created OPEC in part because they chafed at the power of the Seven Sisters. But over the last 30 years, several members have suspended or terminated their membership, including some that left and rejoined.<\/p>\n
Ecuador suspended its membership in 1992 but it rejoined in 2007 and then left again in 2020. Indonesia suspended its membership in 2009 and reactivated in 2016, only to go inactive again the same year. Qatar, which exports both oil and natural gas, left in 2019 and Angola in 2024.<\/p>\n
At its largest, the cartel had 16 members, but after the Emirates\u2019 departure it will have 11, many of them smaller producers in Africa that benefit from the united voice of an organization that gives them a seat at a global table.<\/p>\n
But none of the departures were quite like that of the Emirates, which accounts for about 12 percent of OPEC\u2019s production, or around 3.6 million barrels of oil a day. Now, the Emirates will be free to increase production as it wishes once the Strait of Hormuz reopens.<\/p>\n
After the decision, which followed growing tension with Saudi Arabia, the Emirati energy minister, Suhail Al Mazrouei, sought to reassure the market.<\/p>\n
\u201cWe will look for the right measures to balance the market, the right measures to help the consumers all over the world,\u201d he told The New York Times.<\/p>\n
Analysts at Morningstar said the Emirates was seeking to advance its own ambitions as it evolved \u201cinto one of the region\u2019s diversified energy powerhouses, driven by electrification and economic growth.\u201d<\/p>\n
Outside of Saudi Arabia, the Emirates was one of the few OPEC members with meaningful spare capacity \u2014 or the ability to increase production on short notice. The flexibility to sell more oil has long allowed the group to exert influence over global oil prices, Morningstar analysts said.<\/p>\n
By leaving OPEC, the Emirates is more closely aligning itself with the United States, which has long sought to undermine the OPEC\u2019s influence. President Trump has repeatedly badgered the cartel to produce more oil to lower prices.<\/p>\n
The United States itself has become a leading fossil fuel producer. In 2011, it surpassed Russia in natural gas production and in 2018 overtook Saudi Arabia and Russia as the leading oil producer, according to the Energy Information Administration<\/a>.<\/p>\nSaudi leaders are likely to seek to keep the rest of OPEC together to maintain as much control as it can over the oil market and prices, said Richard Goldberg, a senior fellow at the Foundation for Defense of Democracies, a Washington research organization, who previously worked at the National Security Council.<\/p>\n
\u201cThe Saudis want to stay with other Gulf producers like Kuwait and Iraq,\u201d Mr. Goldberg said.<\/p>\n","protected":false},"excerpt":{"rendered":"OPEC will be less powerful without one of its leading members, the United Arab Emirates. The question is:…\n","protected":false},"author":2,"featured_media":22164,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[6238,8788,8,4689,19,800,35,6307,9,6241,13394,39,8787,13460,279,790,951,13461,282,7,1071,451,13,6237,11259],"class_list":{"0":"post-22163","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-stories","8":"tag-donald-j","9":"tag-fees-and-rates","10":"tag-headlines","11":"tag-international-relations","12":"tag-iran","13":"tag-iraq","14":"tag-kuwait","15":"tag-natural-gas","16":"tag-news","17":"tag-oil-petroleum-and-gasoline","18":"tag-organization-of-the-petroleum-exporting-countries","19":"tag-persian-gulf","20":"tag-prices-fares","21":"tag-production","22":"tag-qatar","23":"tag-russia","24":"tag-saudi-arabia","25":"tag-shutdowns-institutional","26":"tag-strait-of-hormuz","27":"tag-top-stories","28":"tag-trump","29":"tag-united-arab-emirates","30":"tag-united-states","31":"tag-united-states-international-relations","32":"tag-united-states-politics-and-government"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@news\/116488624045827356","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/22163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/comments?post=22163"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/22163\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media\/22164"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media?parent=22163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/categories?post=22163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/tags?post=22163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}