Commerzbank’s Dr. Henry Hao and Charlie Lay note Brent and WTI extended gains as the United Arab Emirates announced it will leave OPEC (Organization of Petroleum Exporting Countries) on 1 May, after years of tension with Saudi Arabia over output policy. They highlight that the ongoing war and blockade of the Strait of Hormuz are already constraining Persian Gulf exports, so immediate market impacts from the UAE’s exit may stay limited.

UAE departure supports higher prices

"Meanwhile, energy markets faced a historic shakeup as the United Arab Emirates (UAE) announced it will leave OPEC next month. The exit on 1 May culminates years of tension with Saudi Arabia over oil output policy and regional influence."

"Energy Minister Suhail Al Mazrouei indicated that the disruption caused by the current war created an opportune time for the departure. He said “This is a decision that we took after a very careful and long review of all our strategies”."

"Despite the UAE's announcement, immediate market impacts from the exit will likely be limited since the ongoing conflict continues to throttle exports from the Persian Gulf."

"Brent crude oil prices rose 2.8% to above USD111. It gained for a seventh consecutive session on lingering concerns grow over the protracted peace process."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)