The UAE’s official withdrawal from OPEC and OPEC+ on the eve of May 2026 is a “turn” in energy geopolitics, from the “institutional convergence” model to “strategic autonomy”.
Samyar Rostami
From another perspective, Abu Dhabi seeks to make the most of the remaining “opportunity” in energy transition by accelerating the extraction and production of oil.
With the UAE’s “divergence” from Saudi Arabia and the growing rifts in the GCC in areas such as competition for foreign policy and defining the role of regional leadership, the “Emirates First” policy and an independent player in the energy equation are being considered.
The UAE’s excess oil production capacity is only effective in conditions of security, stability, and peace in the Persian Gulf
The US-Israeli War Against Iran
The UAE has played a large direct and indirect role in facilitating and assisting the attack on Iran. Many in Iran believe that during the 40-day war, there was a lot of evidence and clues that showed that either the UAE attacked Iran or had visible cooperation with the aggressor and threatened Iran’s national interests.
In recent months, the UAE has suffered the most from Tehran’s retaliatory blow, and the UAE’s gas exports have stopped, and the UAE’s oil production (1.27 million barrels) has also decreased.
Also, the UAE is set to increase its daily production capacity to around 5 million barrels by 2027. But so far, the Iran war has disrupted energy supplies and supply chains through the vital Strait of Hormuz, damaging production facilities and slowing down the UAE’s national plans.
Crises and the Future of the UAE’s Role in the Hydrocarbon Market
The UAE’s decision-making on the future of its role in the oil market is certainly in line with the UAE’s production policy, current and future capacity, long-term strategic and economic outlook, the development of its energy sector, and the acceleration of investment in domestic energy production.
The future of the UAE’s role in the oil market depends on the pace of the energy transition. The UAE is also focusing on investing in increasing hydrocarbon capacity and developing other energy infrastructure.
In the future, the UAE’s role in the oil market is likely to be a combination of factors such as supply power and excess capacity to compensate for potential disruptions, production coordination, and the ability to influence supply quantities.
The UAE is redefining its economic geography to reduce its dependence on Hormuz and shift its economic rotation to the Sea of Oman. Having two coasts is a major geographical advantage for the UAE and can completely change the route of crude oil exports to the Sea of Oman.
The UAE, relying on infrastructure such as the Habshan-Fujairah pipeline, has a comparative advantage in bypassing Hormuz in peacetime. The port of Fujairah is the UAE’s most important ocean port and an alternative export route to bypass the Strait of Hormuz. However, in the event of a continuing crisis and war, Iran could blockade the UAE’s coasts. In any maritime blockade of the UAE, the country’s oil exports would face greater challenges.
Given the crisis in Iran-US relations, the security of energy transport routes in the event of a blocked Strait of Hormuz and tension in the Persian Gulf faces geopolitical risks.
Furthermore, the future role of the UAE will be determined by its production capacity, reserves, and spare capacity. The UAE could act as a “shock absorber” in the oil market due to its ability to increase production.
On paper, the UAE’s significant spare capacity is significant in a crisis-prone environment. The UAE could increase its production to more than 4.5 million barrels per day, while its quota was much lower. But if tensions or war disrupt supply or increase the risk of energy transport routes, the market usually searches for other options.
The continuation of the “Iran war” or any geopolitical crisis in the Persian Gulf could increase geopolitical risks and cause damage to the UAE oil regions, change the direction of energy flows, and form a risk premium in prices.
One of the most important tasks of OPEC and OPEC+ is to implement regulatory policies. Although the activation of unused capacities of the UAE and the ability to export independently and without quota restrictions have been highlighted by Abu Dhabi. However, cooperation with major producers within OPEC or in the form of OPEC+, especially Russia, is needed for broader coordination in supply, and market stability to maintain stability in the oil market.
The UAE’s move to withdraw from OPEC and OPEC+ is more of a political decision, influenced by the West, opposing Riyadh and reflecting a deep regional rift between Riyadh and Abu Dhabi or between two incompatible Arab views in the GCC. But it should be noted that Riyadh, as the largest OPEC producer, by using its power, may impose a heavy cost on the UAE.
The UAE moved closer to the US and Israel in the war against Iran. Many believe that the UAE, as one of the most important financial and military centers in the Persian Gulf, has increasingly expanded its security-weapons cooperation with Israel.
The UAE’s announcement of a “complete” review of its relationships, alliances, and reliance on specific partners (in the oil field) could be seen as a move towards closer alignment with the United States in regional policy. But the reality is that the UAE’s energy sector is particularly vulnerable to external attacks. The closure of the Strait of Hormuz has shown how vulnerable its “visionary” plans and energy economic plans.
In the coming period, the UAE will join a number of independent oil producers, such as the United States. But the UAE’s withdrawal from OPEC and OPEC+ will not weaken the overall influence of the other members.
The UAE will seek to reduce its dependence on the Strait of Hormuz by investing in alternative routes, such as its port of Fujairah on the Gulf of Oman. However, the Strait of Hormuz, a waterway through which much of the country’s oil and goods pass, could be a major variable in the future of the UAE’s role in the energy market.
Furthermore, the UAE’s excess oil production capacity is only effective in conditions of security, stability, and peace in the Persian Gulf.
Although the UAE wants to become an independent producer and be more flexible in the face of constant fluctuations in the oil market, frequent or prolonged wars and security and military disruptions in the region prevent the UAE from presenting itself as a stable hub for energy and oil trade.
Samyar Rostami, а political observer and senior researcher in international relations
No comments:
Post a Comment