United Arab Emirates leaving OPEC, effective May 1

The United Arab Emirates will exit OPEC on May 1, in a major blow to the cartel that coordinates production among many of the world’s largest oil producers, particularly those in the Middle East.

The shock announcement Tuesday comes after the UAE was the target of missile and drone attacks for weeks by fellow OPEC member Iran. Tehran’s attacks on shipping in the Strait of Hormuz has also severely constrained the UAE’s ability to export oil, threatening the foundation of its economy.

The UAE has played an influential role in OPEC’s decisions over nearly six decades. It was the group’s third-largest oil producer in February behind Saudi Arabia and Iraq. The Gulf state joined OPEC in 1967, seven years after the organization was founded.

The UAE did not clearly state why it decided to leave OPEC now. It came to the conclusion that exiting the group was in its national interest following a comprehensive review of its production policy and capacity, the energy ministry said in a statement.

The UAE remains committed to market stability and will continue to cooperate with producers and consumers to that end, the energy ministry said. Its departure from OPEC will give the UAE more flexbility to respond to market dynamics, the ministry added.

“We reaffirm our appreciation for the efforts of both OPEC and the OPEC+ alliance and wish them success,” the energy ministry said.