World oil prices are not expected to be significantly affected despite the United Arab Emirates (UAE) deciding to exit the Organization of the Petroleum Exporting Countries (OPEC).
Prof. Emeritus Jomo Kwame Sundaram, Research Advisor at the Khazanah Research Institute, stated that oil prices are no longer solely influenced by OPEC's decisions, but rather are more determined by geopolitical conflicts and the strategies of major powers such as Iran and the United States (US), according to a report by Berita Harian.
“The current oil price movement is not determined by OPEC alone, (but) more determined by war and war tactics, involving not only Iran but also the US. So I don’t think there is much impact.
“However, it is clear that the UAE is not taking sides with other producing countries now and this raises questions about the agreement between producers to cooperate in determining oil prices,” he said.
UAE More Flexible in Determining Oil Quotas
Previously, the UAE had reportedly announced their decision to leave OPEC and OPEC+, which raised concerns about unity among oil exporting countries.
Prof Jomo explained that while the impact may be limited in the short term, the long-term implications for the global energy market cannot be ignored.
Despite withdrawing, the UAE reiterated its commitment to maintaining the stability of the global oil market. This withdrawal is expected to give the UAE more flexibility to determine its own production quotas without being bound by the cartel’s mandate.
This action marks the end of the UAE’s 57-year involvement in the organization, which it has been a member of since 1967.
