The UAE’s decision to withdraw from the cartel had been “a long time coming,” Obaid Ahmed Al-Zaabi has said
More countries are “very likely” to withdraw from OPEC following the United Arab Emirates’ decision to leave the group, former UAE diplomat to the UN and World Trade Organization Obaid Ahmed Al-Zaabi told RT.
The Gulf nation announced its intent to leave the cartel and broader OPEC+, which brings together OPEC members and other key oil-producing countries, on Tuesday. The withdrawal is set to come into force on May 1.
The UAE’s decision has been a “long time coming,” Al-Zaabi has said, arguing that the country has been “substantially” restricting its production while many other members of the groups have been limited by their output capacities.
“The UAE is no longer entirely dependent on oil and hydrocarbons, and our economy is highly invested all over the world. The organization OPEC acted as a tax on global productivity, and it’s now in our interest to see the world as productive as possible. Also, it costs the UAE the most to impose OPEC,” the ex-diplomat argued.
At the same time, Al-Zaabi suggested that the withdrawal was driven more by “other geopolitical realities” rather than oil itself, pinning the blame on Iran’s retaliatory actions against its Gulf neighbors in the wake of the US-Israeli attack.
“It hardly seems in the UAE’s interest to collude with Iran on the oil price when we’re being directly struck by them,” he argued.
More countries are very likely to follow suit and leave the cartel, the former diplomat said.
“The truth is very likely, because the more people that defect, the more costly it is to maintain the volume restriction. So if the UAE is serious and they no longer respect the limits, then there’s going to be no incentive for Kuwait and other countries to reduce their production.”