The United Arab Emirates announced Tuesday it will leave OPEC, the cartel that organizes production among the world’s largest oil producers, on Friday.
The UAE Energy Ministry said the decision aims to speed up investment in its energy sector and address the country’s long-term economic needs.
“This decision follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs,” the ministry wrote in a statement.
Emirati officials have complained for years that OPEC’s quotas have limited their export capacity and limited their industry’s growth. The UAE joined OPEC, the Organization of the Petroleum Exporting Countries, in 1967 and has been the third-largest oil producer, behind Saudi Arabia and Iraq.
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The cartel controls nearly 50% of the world’s oil production, giving the cartel immense influence over international energy prices.
OPEC sets production limits for each of the 12 member countries. By collectively agreeing to export less oil, member countries reduce global supply and increase prices. The cartel can also order production increases to lower prices.
The cartel’s member countries include Algeria, Equatorial Guinea, Gabon, Kuwait, Libya, Nigeria, the Republic of the Congo and Venezuela.
The decision comes after Iran, another OPEC member, launched a closure of the Strait of Hormuz, further limiting the UAE’s oil exports.
