The UAE’s OPEC Exit Is Existential for the Oil Cartel

Three of the most dangerous words in the oil market are "OPEC is dead." Its obituary has been written many, many times — always prematurely. Global finance provides another, equally storied phrase: “This time is different.” The departure of the United Arab Emirates from the oil cartel, announced on Tuesday and effective May 1, is quantitatively more serious than previous withdrawals and poses the biggest existential crisis the group has faced since its establishment more than half a century ago.

The almost continuous exodus of member countries from the Organization of the Petroleum Exporting Countries during the past decade — Indonesia in 2016, Qatar in 2019, Ecuador in 2020 and Angola in 2023 — provided ample opportunity to prepare eulogies, all of which were proved wrong. But the UAE is in a different league: It’s a country with ambitions to pump significantly more oil, it has the geological endowment to support its zeal and, more importantly, it has the money to transform its dream into a reality.