Al-Otaiba: The UAE’s exit from OPEC reflects economic diversification and energy expansion for global security and stability, as well as oil revenues for global reinvestment, and identified the following points:
- Less than a quarter of our GDP is energy-related.
- The world needs more reliable and affordable energy. The UAE’s interest is in a stable, not a turbulent, neighborhood. We have a significant energy surplus and the infrastructure to expand it. The country is capable of contributing to global energy security.
- Our revenues from increased production will not be accumulated, but will be reinvested globally.
Yousef Al Otaiba, the UAE ambassador to the United States, revealed in an article in the Financial Times the reasons for the UAE’s withdrawal from OPEC and the OPEC+ alliance.
In his article, titled “The UAE’s Exit from OPEC: Oil Revenues as a Means to an End“, Al Otaiba writes: “Forty years ago, I attended my first OPEC meeting. It was the first time I wore a suit and tie, and I was thirteen years old. I was not happy, nor was my father, Mana Al Otaiba, then the UAE’s Minister of Petroleum and Mineral Resources. It was 1986, and the price of oil had crashed below $10 a barrel earlier that year. My father spent months lobbying other OPEC members to increase production quotas and stabilize prices. News reports from the August conference in Geneva reflected this sentiment.“
He noted that “last week, after nearly 60 years of membership, the United Arab Emirates announced its withdrawal“, adding that “this decision goes far beyond simple production quotas or wartime interruptions“.
He continued: “This change reflects structural changes in global energy markets, fundamental changes in the global economy, and a clear vision for the UAE’s position and future path.“
In his article, Al Otaiba pointed out that OPEC was created for countries whose economies depend on oil, and the UAE has long ceased to be one of those countries. He noted that “we joined OPEC as Abu Dhabi before we became an independent nation. Later, we were a young nation whose economy was almost entirely dependent on oil revenues.“
He added: “The OPEC framework - collective production management, shared discipline and coordinated pricing - was well suited to a nation new to international energy markets and the global economy. It gave us experience, stability and influence that a small, newly independent nation could not have achieved on its own. But that nation no longer exists.“
He said: “Currently, less than a quarter of our GDP is related to energy. The fastest growing sectors are aviation, logistics, advanced manufacturing, artificial intelligence, tourism and life sciences.“
He stressed that “over the past four years, we have signed 35 comprehensive economic partnership agreements (15 of which are already in force) with India, South Korea, Indonesia, Ukraine, Israel, Kenya, Malaysia, Vietnam, Jordan and others, expanding our access to markets covering billions of people“. He noted that they are working on a bilateral trade agreement with the European Union. He added that they had also committed to a $1.4 trillion investment and technology partnership with the United States.
He continued: “This does not reflect the image of a nation whose primary focus is managing oil supplies within a collective framework.“
Al-Otaiba said: “The past year has served as a wake-up call to every government and every household about the realities of energy insecurity. Regional instability has disrupted supplies, driven prices to record highs and imposed heavy costs on consumers, farmers and businesses from Des Moines to Delhi. The lesson is clear: the world needs more reliable and affordable energy, and it needs producers capable of delivering it.“
Al-Otaiba stressed that the UAE’s interest lies in a stable, not a turbulent, neighborhood, and that its energy policy, like its foreign policy, is geared toward that goal. He noted: “We have a significant energy surplus and the infrastructure to expand it. We intend to invest tens of billions of dollars in new pipelines, port development and improved logistics to ensure that our energy reaches the markets that need it, no matter the circumstances.“
He continued: “Our goal is to reach a production capacity of 5 million barrels per day by 2027. However, within the framework of collective production, this capacity remains unused. Therefore, withdrawing from OPEC is not just a matter of commercial calculations, but a responsibility.“
Al Otaiba stressed that the UAE has the capacity to contribute to global energy security and international economic stability at a time when this security and stability are under real threat. And we are determined to do so.
He said: “Our revenues from increased production will not only be accumulated, but will also be reinvested in infrastructure projects in the developing world. Masdar, our renewable energy company, has spent 20 years building capacity in 40 countries, including the United States. The Barakah Nuclear Power Plant - the first nuclear power plant in the Arab world - is now operational and producing major clean energy. ADNOC has committed tens of billions of dollars to developing low-carbon solutions through its new international investment arm, XRG.“
He added: “We do not choose between oil and the energy transition; we finance one with the other. As if these reasons were not enough for Iran to leave OPEC, it remains a member bound by its rules, despite ignoring the organization's stated mission “to ensure the stability of oil markets in order to ensure efficient, economical and reliable supplies of oil to consumers“. In violation of the ceasefire and international law, Iran renewed its attacks on oil tankers and energy infrastructure in the Persian Gulf on Sunday.
He continued: “I spoke to my father last week. As a six-time OPEC president, I expected him to have mixed feelings about the UAE leaving an organization to which he had dedicated so much of his career.
But he reminded me that this had been the plan all along. Just like that suit and tie from 1986, we had moved beyond OPEC. He said that oil revenues were always a means to an end. The goal was never to be an oil-producing nation, but to build something more sustainable – a diversified economy, a knowledge-based society, and a country with the depth and partnerships to succeed, no matter what the world looked like in the future.