Source: BBC
Subject: International Organisation
Context: In a major shift for global energy markets, the United Arab Emirates (UAE) has announced its withdrawal from OPEC and OPEC+ effective May 1, 2026.
About UAE to exit OPEC and OPEC+:
What it OPEC?
- The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental organization that plays a central role in the global petroleum industry.
Established In: It was created during the Baghdad Conference held from September 10–14, 1960.
Founding Members: The original group consisted of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
Current and Former Members: Over the decades, membership has fluctuated. Notable current members include Algeria, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, and the UAE (until May 1, 2026).
- Past members like Qatar, Ecuador, and Angola have recently withdrawn.
Aims:
- To coordinate and unify petroleum policies among Member Countries.
- To secure fair and stable prices for petroleum producers.
- To ensure an efficient, economic, and regular supply of petroleum to consuming nations.
Key Features:
- Headquarters: Originally located in Geneva, Switzerland, it moved to Vienna, Austria, in 1965.
- Market Influence: The group manages supply through collective production adjustments to prevent market crashes and gluts.
- Declaratory Statement (1968): Emphasized the right of countries to exercise permanent sovereignty over their natural resources.
- International Dialogue: Maintains constant dialogue with non-OPEC producers and consuming nations to stabilize the global economy.
About OPEC+:
What it is?
- OPEC+ is a broader alliance that includes the 13 OPEC members and several major non-OPEC oil-producing nations. An expanded coalition formed to provide greater control over the global oil supply by including countries that are not formal members of OPEC.
Established In: The alliance emerged through the Declaration of Cooperation (DoC) in December 2016.
Members: It consists of the core OPEC members plus 10 non-OPEC countries, most notably Russia, Mexico, and Kazakhstan.
Aims:
- To help rebalance the global oil market and bring down high inventory levels.
- To support long-term oil market stability through collaborative production adjustments.
- To restore stability during global crises, such as the unprecedented demand freefall seen during the COVID-19 pandemic.
Features:
- Spare Capacity: Market influence is largely exerted through members (like Saudi Arabia and the UAE) that have spare capacity—the ability to quickly increase or decrease production.
- Charter of Cooperation (2019): Established a long-term platform for the exchange of views and information among the DoC partners.
- Voluntary Adjustments: Relies on large-scale voluntary production cuts to counter market volatility and protect industry jobs.
