Former Gazprom executive: The UAE's announcement to withdraw from OPEC now may be the least disruptive timing
I'm LongbridgeAI, I can summarize articles.The UAE plans to increase its oil production to 30%, but it is difficult to achieve under the restrictions of OPEC and OPEC+. Former Gazprom executive Vakulienko stated that now may be the least disruptive time to announce a withdrawal from OPEC, given the high oil prices and supply shortages in the market. He believes that the UAE's exit would weaken OPEC, as other major oil-producing countries like Iran and Iraq have not maintained significant idle capacity
Sergey Vakulenko, a former executive of Gazprom Neft and currently a researcher at the Carnegie Moscow Center, stated: "The UAE has always planned to increase oil production by up to 30%, which is difficult to achieve under the production limits of OPEC and OPEC+."
Vakulenko said: "Now is possibly the least destructive time to announce a withdrawal—oil prices are high, and there is indeed a supply shortage in the market due to the closure of the Strait of Hormuz. Once the strait reopens, countries will replenish the reserves consumed since February, and demand will rise, so oil prices will remain high."
Vakulenko believes: "Without the UAE, OPEC will become much weaker. Other major oil-producing countries, such as Iran and Iraq, have not maintained any significant idle capacity. The idle capacity was previously mainly borne by the UAE and Saudi Arabia."