Opec’s standing
After six decades of membership, the United Arab Emirates (UAE) has exited from Opec, the Organisation of Petroleum Exporting Countries. For decades, the organisation has controlled the price of crude oil, utilising the increase or decrease of production, as well as allocating quotas across its membership.
The organisation, formed in 1960, is predominantly made up of Gulf oil exporters, with the five first members being Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The aim of the organisation is to ensure efficient, economic and regular supply of oil to consumers, maintaining a steady income for producers and a fair return on capital.
The UAE joined Opec in 1967, becoming the fourth biggest oil producer in the organisation but the second most important swing producer as it had the second highest spare production capacity. The member countries are intended to have co-ordinated and unified petroleum policies. As such, it was a vital organisation amid the 1970s oil crises.
The UAE was a significant player within Opec, with the ability of increasing production in order to lessen prices amid oil crises. This led to the disproportionate losses to UAE revenue. Now, the region is exiting from the organisation in order to have greater control of its own resources.
“This is a policy decision, it has been done after a careful look at current and future policies related to level of production,” UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters.