UAE’s Saudi schism deepens with move to quit OPEC

Key Points:

• The UAE announced its departure from OPEC, ending a membership that began in 1967, signaling a blow to the cartel's unity amid recent struggles to maintain cohesion.
• Despite the announcement, immediate oil markets are unlikely to react strongly due to the closure of the Strait of Hormuz, which already limits Gulf oil production capabilities.
• The UAE has long been frustrated with OPEC's production limits and now aims to maximize crude sales, especially given the region's reliance on uncertain export routes that are costly and years from completion.
• The move reflects a broader shift in the UAE's foreign policy, showing reluctance to maintain historic alliances for the sake of harmony, notably straining relations with Saudi Arabia amid regional security tensions.
• The UAE's withdrawal from OPEC and absence from a key Gulf leaders' meeting highlight a growing rift with Saudi Arabia, fueled by competing regional ambitions and economic rivalry, suggesting further potential breaks from multilateral organizations.