<\/p>\n
By Sheldeen Joy Talavera, <\/b>Reporter<\/i><\/p>\n
THE UNITED Arab Emirates\u2019 <\/span>(UAE) exit from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) <\/span>may gain advantage oil-importing <\/span>countries just like the Philippines <\/span>if it results in higher output and <\/span>softer prices, analysts said.<\/span><\/p>\n Jose M. Layug, a former Energy undersecretary, said the impact would rely upon how the UAE adjusts its production outside the group\u2019s quota system.<\/span><\/p>\n \u201cIf it’s going to produce more supply without following the output limits of OPEC production and offer reduced prices to capture a much bigger chunk of the market, then it might be good for the Philippines,\u201d he said in a Viber message.<\/p>\n The UAE on Tuesday said it would depart OPEC and the broader OPEC+ alliance effective May 1, removing one among the group\u2019s biggest producers from coordinated output limits.<\/p>\n Analysts said the move could have mixed effects. Leo P. Bellas, president of Jetti Petroleum, Inc., said the exit could push prices higher within the short term because it removes supply from OPEC\u2019s coordinated pool.<\/span><\/p>\n \u201cThe UAE\u2019s departure\u2026 removed the organization\u2019s third-largest producer from the quota framework,\u201d he said in a Viber message, adding that it comes at a time when global spare capability stays tight following disruptions within the Strait of Hormuz.<\/p>\n Nevertheless, the shift could eventually be bearish for prices if the UAE increases production independently, Mr. Bellas said.<\/p>\n \u201cFor now, worries about supply constraints\u2026 are keeping prices elevated and outweigh concerns on the bearish effects of the UAE\u2019s departure,\u201d he added.<\/p>\n OPEC and its allies will lose a few of their power over the oil market when the UAE leaves the group after nearly 60 years as a member, but the remainder of the producer alliance is more likely to stick together and proceed to coordinate on oil supply policy, OPEC+ delegates and analysts said.<\/p>\n That may free Abu Dhabi from the oil production targets imposed by OPEC and its allies to balance supply and demand.<\/p>\n Brigitte Carmel Lim, senior vice-president and chief operating off<\/span>icer at Cebu-based Top Line Business Development Corp., said the event might add volatility fairly than immediately affect supply.<\/p>\n \u201cThe predominant query is whether or not they are going to increase output independently, which could soften prices, but that\u2019s still uncertain,\u201d she said via Viber.<\/span><\/p>\n Global oil prices have surged amid the US-Israel war on Iran, which has disrupted supply flows and heightened inflation risks.<\/p>\n Local pump prices remain tied to global benchmarks. Diesel and kerosene have posted recent rollbacks, while gasoline prices rose barely this week, <\/span>reflecting mixed market movements.<\/p>\n The UAE\u2019s exit got here as a shock, said five OPEC+ sources who asked to not be named because they aren’t allowed to talk to the press.<\/p>\n The exit would complicate OPEC+\u2019s efforts to balance the market through adjustments to provide since the group would have control over less of worldwide production, 4 of the five sources said.<\/p>\n The UAE will develop into the largest oil producer to depart OPEC, a heavy blow to the organization and its de facto leader Saudi Arabia. Abu Dhabi pumped about 3.4 million barrels per day (bpd) or about 3% of the world\u2019s crude supply before the US-Israeli war on Iran forced it and other Middle East Gulf producers to curb shipments and shut down some production.<\/span><\/p>\n OPEC and the Saudi government communication of<\/span>f<\/span>ice didn’t immediately reply to a request for comment.<\/span><\/p>\n Once outside OPEC, the UAE will join the ranks of independent oil producers that pump at will, reminiscent of the US and Brazil. For now, there will not be much the UAE can do to extend production or exports as a consequence of the effective closure of shipping through the Strait of Hormuz. If and when shipping recovers to prewar levels, the UAE could increase output to the country\u2019s capability of 5 million bpd of crude oil and liquids.<\/span><\/p>\n There was tension between the UAE and Saudi Arabia over the Emiratis\u2019 production quota, which stands at 3.5 million bpd. The UAE has asked for a much bigger quota to reflect the undeniable fact that it had expanded capability as a part of a $150-billion investment program.<\/span><\/p>\n \u201cFor years, Abu Dhabi has been seeking to monetize its investment in expanding capability,\u201d said Helima Croft from RBC Capital Markets. The US-Israeli war on Iran would, nonetheless, slow those plans down after drones and rockets damaged the UAE\u2019s production facilities, she said.<\/p>\n The war has resulted within the biggest-ever global energy supply disruption by way of outright each day oil production, in response to the International Energy Agency (IEA). The war has also exposed discord amongst Gulf nations, including between the UAE and Saudi Arabia.<\/span><\/p>\n Rumors of the UAE\u2019s exit from OPEC+ have circulated for years amid worsening relations with Riyadh over conflicts in Sudan, Somalia and Yemen. The UAE has also grown increasingly near the US and Israel.<\/p>\n IRAQ STAYS IN Iraq, the third-largest producer in OPEC+ after Saudi Arabia and Russia, has no plan to go away OPEC+ because it wants stable and acceptable oil prices, two Iraqi oil officials said.<\/span><\/p>\n OPEC+ is not going to collapse as Saudi Arabia will still wish to manage the market with the assistance of the group, said Gary Ross, a veteran OPEC watcher and CEO at Black Gold Investors.<\/p>\n \u201cAt the tip of the day, Saudi Arabia was essentially OPEC \u2014 the one country with spare capability,\u201d he said. Saudi Arabia can produce 12.5 million bpd but has in recent times kept production under 10 million bpd.<\/p>\n OPEC+ membership gives countries more diplomatic and international weight \u2014 one among the explanations cited by analysts behind Iran\u2019s decision to remain in OPEC even at the height of its fight with Gulf countries.<\/p>\n US President Donald J. Trump has accused OPEC of \u201cripping off the remainder of the world\u201d by inflating oil prices. He has said the US might reconsider military support to the Gulf due to OPEC oil policies.<\/p>\n It was, nonetheless, Mr. Trump who helped persuade OPEC+ to chop output in 2020 throughout the COVID pandemic as oil prices slumped and US producers suffered.<\/p>\n \u201cThe UAE withdrawal marks a major shift for OPEC\u2026 the longer-term implication is a structurally weaker OPEC,\u201d said Jorge Leon, a former OPEC off<\/span>icial who now works at Rystad Energy.<\/p>\n OPEC+ members will likely be more focused on rebuilding facilities hit by the war fairly than on embarking on production cuts within the near future, Ms. Croft said. Hence, the broader OPEC+ breakup will not be on the cards for now, she added.<\/p>\n DECLINING POWER Formed in 1960, OPEC once controlled over 50% of worldwide output. As rivals\u2019 production grew, the group\u2019s share declined to about 30% of the world\u2019s total oil and oil liquids output of 105 million bpd last yr.<\/p>\n The US, which used to depend on imports from OPEC members, has develop into its biggest rival over the past 15 years. The US has raised production to as much as 20% of the world\u2019s total on the back of its shale oil boom.<\/p>\n The US production spike prompted OPEC to team up in 2016 with several non-OPEC producers to form OPEC+, a bunch led by Russia \u2014 previously one among Saudi Arabia\u2019s top rivals within the oil industry.<\/p>\n The alliance gave the group control over about 50% of the world\u2019s total oil production in 2025, in response to the IEA. The lack of the UAE means it’s going to decline to about 45%. \u2014 with <\/i>Reuters<\/b><\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" REUTERS By Sheldeen Joy Talavera, Reporter THE UNITED Arab Emirates\u2019 (UAE) exit from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) may gain advantage oil-importing countries just like the Philippines if it results in higher output and softer prices, analysts said. Jose M. 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<\/b>The UAE is the fourth producer to quit OPEC+ in recent times, and by far the largest. Angola quit the bloc in 2024, citing disagreements over production levels. Ecuador quit OPEC in 2020 and Qatar in 2019.<\/p>\n
<\/b>OPEC\u2019s sway over the market has been declining for a long time.<\/p>\n