UAE Shocks Global Markets, Quits OPEC Amid Iran War and Soaring Oil Prices — African Economies Brace for Impact
JUBA, South Sudan — The United Arab Emirates on Tuesday announced its shock withdrawal from the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ alliance, effective May 1, in a historic move that is reshaping global energy markets amid the ongoing Iran conflict and sending shockwaves through African economies already reeling from skyrocketing fuel prices.
Brent crude oil surged past $113 per barrel on Wednesday — the highest level since June 2022 — with prices gaining for the eighth consecutive session. West Texas Intermediate jumped above $106 a barrel as markets absorbed the twin shocks of the UAE’s exit from the oil cartel and the continued closure of the Strait of Hormuz, a critical chokepoint through which about 20% of the world’s oil passes.
Historic Break from the Cartel
The UAE — OPEC’s third-largest producer — notified the cartel of its decision to withdraw during an emergency meeting of the Gulf Cooperation Council in Jeddah, Saudi Arabia. Emirati Energy Minister Suhail Al Mazrouei told The New York Times that the decision was driven by a desire for greater flexibility to increase production to meet growing global demand, free from OPEC’s quota constraints.
“The UAE has a long-term strategic and economic vision,” the state news agency WAM reported. The country aims to reach 5 million barrels per day of production capacity by 2027.
The departure is widely seen as a significant blow to Saudi Arabia’s influence within the cartel and positions the UAE as the Gulf state most aligned with U.S. President Donald Trump, a longtime critic of OPEC. Analysts say the move will likely give the UAE more freedom to pump oil without the constraints of the cartel’s production quotas, which had reportedly cut output by about 2 million barrels per day.
Oil Markets in Turmoil
Oil has surged by over 82% so far this year, fueled by the conflict with Iran that began 60 days ago and has disrupted shipping through the Strait of Hormuz. On Wednesday, Trump intensified pressure on Tehran, posting on Truth Social that Iran “better get smart soon” alongside a mocked-up image of himself holding a gun.
South Africa’s National Treasury moved swiftly to extend emergency fuel relief, keeping the general fuel levy reduction of R3 per litre through June and cutting diesel levies to zero, effective May 6, as Brent crude pushed above $111.
Impact on South Sudan and Africa
For South Sudan — which relies heavily on oil revenues for its national budget — the global oil price surge comes at a dire moment. Nearly 8 million people in the country face acute hunger, according to a new UN-backed report released this week. A U.S. diplomat also raised fresh concerns on Wednesday over the effectiveness of billions of dollars generated from oil revenues and international aid in the country.
Across Africa, the fuel crisis is compounding economic hardship. The African Union met this week in Equatorial Guinea to align continental priorities for the 2026 G20 Presidency under the United States, with discussions focused on critical minerals, debt sustainability, and the impact of the energy crisis on African economies.
“The exit of the UAE from OPEC will not have immediate implications for global supply, but it does suggest that global supplies will be higher than would otherwise be the case once the Strait of Hormuz reopens,” said David Oxley, chief climate and commodities economist at Capital Economics.
Broader Geopolitical Fallout
The UAE’s departure marks the most significant fracture within OPEC since its founding in 1960. Analysts say it could trigger further exits, with other producers potentially seeking more autonomy. The move also deepens the Saudi-Emirati rift, as the two Gulf heavyweights diverge on approach to the Iran conflict and relations with the Trump administration.
The 12-nation OPEC — reduced to 11 members from May 1 — will now have less ability to coordinate production cuts or price supports. The wider OPEC+ group, which includes Russia and other allies, could also face cohesion challenges.
— JubaGlobal News
