Business Recorder
EDITORIAL: United Arab Emirates (UAE) announced its decision to leave the 13-member Organisation of the Petroleum Exporting Countries (OPEC), including Iran, as well as OPEC+ (an additional 10 member countries, including Russia) this Tuesday effective 1 May to “focus on national interests” and “reflects the UAE’s long-term strategic and economic vision and evolving energy profile.” The announcement coincided with the Gulf leaders meeting in Riyadh with the UAE represented by deputy prime minister Abdullah bin Zayed Al Nahyan, the ninth son of the UAE founder and a signatory to the Abraham accords on behalf of his country. The next ministerial OPEC meeting is scheduled for 7 June to discuss long-term production policy decisions, quota adjustments and market stability. OPEC/OPEC+ account for 40 to 41 percent of total global output with the UAE accounting for 12 percent of total OPEC output. It is the third-largest oil producer and hence its relevance to OPEC decision-making cannot be underestimated. Be that as it may, there are two serious issues facing the Gulf countries due to the ongoing Middle East conflict: Iranian retaliatory drone and missile attacks on their production capacities, (Qatar, Bahrain, Kuwait, and Iraq have declared force majeure as well as several firms in other countries) coupled with limiting passage of ships through the Strait of Hormuz to those that have paid the toll fee and cleared for not carrying cargo destined for Iran’s enemies. The UAE oil production quota was agreed within the OPEC context and its exit would allow other member(s) to take over its quota. There is the possibility that OPEC members may decide to price UAE oil out of the market by taking losses. However, these are considerations that will surface post-conflict and, at the present moment in time, these are academic questions at best. There are questions on the timing of the UAE decision. Reportedly, Iranian attacks on the UAE were more in number than even on the Islamic republic’s arch-enemy Israel (though neither country allows for an independent verification of the damage) – attacks that have not only compromised oil and related product exports but also the thriving UAE tourism sector with some reports suggesting that Dubai hotel occupancy today is around 10 percent or less. The UAE was embarked on aggressively pursuing “Stargate,” a 30 billion-dollar Artificial Intelligence data centre in Abu Dhabi, with the pre-conflict completion date later this year. The objective: to train and deploy advanced generative AI supported by US partners including Oracle, NVIDIA, and Microsoft – a project that Iran has warned it will attack if the US and Israeli threatened attacks on its civilian infrastructure are carried out. What is however surprising is that while Saudi Arabia and Qatar are engaging with Iranian officials based on the principle that geography does and should act as a fundamental determinant in shaping relationships, alliance and conflict, the UAE appears to have deepened ties with the US and requested a swap arrangement in spite of the fact that UAE’s state bank announced foreign assets of 272 billion dollars end-March 2026 with over 2 trillion dollar sovereign investment funds. Analysts point to political decisions taken in recent years by the UAE emerging as a key regional influencer angering its Gulf partners. These decisions include support for Yemen’s Southern Transitional Council angering Saudi Arabia, recognition of Somaliland (with Israel the only other country to recognize it), separatists in Libya and Sudan to name a few others. The growing rift with regional partners has therefore come to a head with the US-Israel attack on Iran. Many in Pakistan maintain that the UAE’s request to recall its 4.5 billion-dollar loan was premised on our support for Saudi Arabia and had urged for an adjustment with the 800 million dollar pending payment by Etisalat for purchase of PTCL in 2005 – twenty-one years ago. It may be recalled that Ishaq Dar as finance minister had stated on the floor of the house that around 200 billion dollar assets were held by Pakistanis in the UAE, assets that have no doubt lost considerable value since with some estimates placing the loss at over 70 percent. Perhaps these are factors that have compelled the government of Pakistan to tread with extreme care in its dealings with the UAE. Copyright Business Recorder, 2026
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