UAE Leaves OPEC, Shaking the Oil Market

Tensions inside OPEC have been growing for years. The group's production limits had capped UAE output at between 3 and 3.5 million barrels per day, although the country can produce up to 4.8 million. Officials in Abu Dhabi were unhappy about losing income to support a system led mainly by Saudi Arabia. The recent war has made these tensions worse: a senior UAE adviser publicly criticised other Gulf states for not protecting his country from Iranian attacks. Analysts also say the UAE wants to sell its oil reserves before the world shifts away from fossil fuels.

The decision could change the global oil market. The UAE plans to slowly raise production to about 5 million barrels per day. Experts at Rystad Energy warn that OPEC will become "structurally weaker" in the long term. Saudi Arabia might respond with a price war, which the UAE's diversified economy could survive but which could badly hurt poorer members. US President Donald Trump welcomed the news; last week he said the two countries had discussed a currency-exchange deal. With oil already near $111 a barrel, drivers around the world may soon see higher prices at the pump.