UAE has doubled down on Israel and America

Key topics:UAE quits OPEC to pursue higher oil output over price controlsMove signals closer US-Israel ties and widening Gulf rift with SaudiOPEC’s influence wanes amid Gulf tensions and Iran security risks.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..From The Economist, published under licence. The original article can be found on www.economist.com© 2025 The Economist Newspaper Limited. All rights reserved..The Economist.At last it has jumped. For years the United Arab Emirates (UAE) chafed at restrictions that came with membership of the Organisation of the Petroleum Exporting Countries (OPEC). It had even threatened to quit; and on April 27th, in the middle of a war, it stormed out.That raises two sets of questions. The straightforward one is about the future of OPEC itself. A more complex one is about security in a part of the world rocked by the war with Iran. In spite of all the problems that America and Israel have caused the Emirates with their unfinished campaign, the UAE’s abandonment of OPEC has sent an unambiguous signal that it remains in their camp. As much as that may please President Donald Trump, it is a slap in the face for the rest of the Gulf, and especially Saudi Arabia.The Emiratis have good reasons for leaving OPEC. In the next few years they want to increase oil production, from 3.6m barrels a day to 5m. Other members prefer to try to keep the price of oil high; the Emiratis want volume..Read more:.UAE exit rocks OPEC: A historic blow to the oil cartel.Does that mean OPEC is dying? Perhaps slowly. The Emirates’ departure is another blow to an already waning body. Other members, such as Venezuela, may follow. But the Saudis, who in effect lead the organisation, downplayed the news. The Emiratis often broke production quotas and the remaining members, plus allies such as Russia, will still account for some 40% of global oil output. It may even be easier to keep discipline without the troublemaker inside. In any case, OPEC will matter again only after the war, when a global oil glut is once again possible.The geopolitics are more pressing. The news of the UAE’s decision was met with glee in Israel. People there are delighted by anything that weakens Iran, which remains inside the cartel. And the UAE’s pullout suggests it wants warmer relations with the Jewish state. The two governments, signatories of the Abraham accords, share an intense antipathy towards Islamist extremism. The UAE has avoided clashes with Israel even as it pursued destructive wars in Gaza, Lebanon and beyond. Other Arab states fear Israel as a disruptive regional power, even a dominant one; the UAE still wants to do deals with it.Second, and closely related, the UAE is sending a message to America, where Mr Trump can see OPEC’s loss as his own strategic gain. The UAE has suffered more than any of its near neighbours from Iranian missile and drone strikes. Yet rather than publicly blame Mr Trump for starting the war, the UAE has chided other countries for offering too little solidarity. By quitting OPEC now, the UAE shows that it looks to America and Israel for security. As important, it is seeking to further develop an economy that complements its exports of fossil fuels, with ties to America in travel, investment and technology.Last, the UAE is showing it is willing to further alienate the six-member Gulf Co-operation Council, and most obviously Saudi Arabia. The two monarchies have been feuding, needling one another in proxy conflicts even as both are threatened by Iran. The bitterest clash is in Yemen’s protracted civil war, where the Saudis bombed an Emirati arms shipment in December, bringing the two sides close to a direct military clash. The bloodiest effects of their rivalry are in Sudan, where the Saudis support the government and the UAE has backed a genocidal rebel force (an allegation that it continues to deny strenuously).Much remains uncertain, not least the question of how America and Iran will eventually make something resembling peace. The UAE’s bet on forging closer ties with America and Israel, while drawing away from its Gulf neighbours, comes laden with risk. For now, the UAE must expect to pump less oil, not more, regardless of its relationship with OPEC. In the medium term, Iran could emerge from the war more powerful, with a lingering chokehold over the Strait of Hormuz, and thus over its neighbours’ economies. That is a danger for all the other Gulf countries. Finding ways to unite against it would seem wise. Instead, the UAE is setting its own course.

UAE has doubled down on Israel and America

Key topics:

From The Economist, published under licence. The original article can be found on www.economist.com

© 2025 The Economist Newspaper Limited. All rights reserved.

The Economist

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