South Korean media: "Saudi Oil Cartel" UAE walks out… Joining hands with the US to challenge Middle East hegemony

Leaving OPEC tomorrow, beginning independent production expansion

On the 28th local time in the UAE, it officially exited the Organization of the Petroleum Exporting Countries (OPEC), bringing a significant shift to the Middle Eastern economic and security order centered around the Gulf Cooperation Council (GCC) and led by Saudi Arabia. After Iran's war erupted in February last year, the UAE suffered massive retaliatory attacks from Iran, but the GCC’s response was negligible. Analysts believe the UAE has drawn profound security lessons from this experience and will now firmly strengthen the military and economic protection provided by the United States, deciding to directly challenge “the Saudi-centered Middle Eastern order.” Particularly, during an emergency GCC meeting held in Jeddah, Saudi Arabia, the UAE suddenly announced its exit from OPEC. In an interview with The New York Times (NYT), senior researcher Kristine Deyan from the Arab Gulf Institute described this move as “a declaration of UAE independence.”

Is the core position of Saudi oil cartel under threat?

Data from the U.S. Energy Information Administration (EIA) shows that the UAE produced approximately 3.4 million barrels per day of crude oil last year, accounting for about 12% of OPEC’s total output—making it the third-largest actual producer. Estimated maximum daily capacity ranges between 4.5 to 5 million barrels, placing it among the few oil-producing nations outside Saudi Arabia with substantial excess capacity.

The background behind the UAE’s departure from OPEC lies in dissatisfaction with Saudi-led production quota policies. While the UAE steadily expanded its production capacity, it remained constrained by OPEC quotas, consistently producing more than 1 million barrels per day below its maximum potential. UAE Minister of Energy Suhail Al Mazrouei stated: “Exiting OPEC and OPEC+ frees us from production obligations and grants us greater flexibility.” Industry experts predict that following Qatar’s withdrawal in 2019, the UAE’s exit may trigger further independent actions by other oil-producing nations.

With the UAE’s exit from OPEC, international oil prices are expected to face downward pressure, accompanied by growing concerns over increased market volatility. A source from a refining company said: “If competing oil producers break free from OPEC’s control, Saudi Arabia will struggle to actively raise official selling prices (OSP) in the Asian market.” Another expert noted: “Repeated sharp drops in oil prices could reduce the value of high-cost crude inventories, leading to frequent increases in inventory valuation losses.”

Professor Shin Hyun-dong from Inha University remarked: “This can be seen as the beginning of the weakening of the OPEC cartel. In the medium to long term, the more weakened the cartel becomes, the more beneficial it is for consumer countries.” Kim Tae-hwan (phonetic), head of the Oil Policy Division at the Institute for Energy Economics, added: “A decline in oil prices creates opportunities to replenish strategic reserves, and we can also leverage the competition between Saudi Arabia and the UAE to enhance our negotiating power.”

Breaking away from GCC, shifting toward the Abraham Accords centered on the United States

The UAE’s autonomous action is interpreted not merely as a policy shift within the oil-producing sphere, but as a broader strategic realignment—moving away from internal Gulf alliances and seeking closer ties with the global power, the United States. UAE Presidential Advisor Anwar Al Gargash said: “Unity among Gulf states offers no help for national defense.” On the contrary, when speaking about the United States, he emphasized: “Today, America’s role in the region is even more critical. Its influence extends beyond military support to include defense systems, political backing, and economic and financial interventions.”

During this conflict, the UAE endured as many as 2,200 missile and drone attacks, calling on Saudi Arabia, Qatar, and others to act collectively. However, no practical cooperation emerged at the GCC level. As a result, analysts—including Professor In Nam-jik from the National Diplomatic Academy—suggest the UAE concluded it would be more advantageous to align with the U.S. and Israel through the “Abraham Accords.” Indeed, the UAE has already deployed Israel’s “Iron Dome” system and, in the field of artificial intelligence (AI), abandoned earlier focus on Chinese firms like Huawei and Alibaba, instead building infrastructure based on American technology.

Some view the UAE’s close economic and military cooperation with the U.S. as setting the stage for formal competition with Saudi Arabia over dominance in the Middle East. Recently, the UAE swiftly reclaimed up to $350 million in foreign exchange deposits held in Pakistan—equivalent to one-fifth of its total foreign reserves—deposits originally intended for mediating peace talks between the U.S. and Iran. This move is seen as retaliation against Pakistan for failing to join what the UAE hoped would be a “condemn Iran coalition,” while Saudi Arabia immediately pledged support to Pakistan. Currently, both nations are supporting opposing factions in the conflicts in Yemen and Sudan, engaging in psychological warfare.

Britain’s The Economist magazine analyzed that deep-seated regional grievances and issues of pride also contribute to tensions between the two. Saudi Arabia, the most populous GCC country (with 35.3 million people), has made dismissive remarks such as calling the UAE (10.88 million people) a “rebellious little brother,” which greatly angered the UAE.

Source: Chosun Ilbo

Original article: toutiao.com/article/1863872455273545/

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