UAE's OPEC exit and the aftermath

The most powerful and influential international organisations between countries emerged after World War II. It is a fact that the United Nations has lost its sheen over the years. The relevance of the UN began to decline when major member countries started to stand against it and make decisions of their own accord. The emergence of new economic equations in the world after globalisation also led to the decline in the relevance of organisations. The positions of the United States, the world's largest economic power, sapped the strength of general international organisations.

The withdrawal of the United Arab Emirates (UAE) from the Organisation of the Petroleum Exporting Countries(OPEC), a group of oil-producing countries, gives a glimpse of the existing epidemic weakening powerful organisations. There is no doubt that the conflict and war in the Middle East have led the UAE to such a decision. The UAE announced that it will withdraw from OPEC from May 1 based on the realisation that being a member of the organisation may harm the interests, development and progress of its country. By leaving OPEC, the UAE will be able to increase oil production according to market demand and pursue an independent energy policy.

The UAE now wants to increase oil production, but is unable to do so because it is a member of OPEC. OPEC decides how many million barrels of oil its members should produce. The largest oil-producing countries in OPEC are Saudi Arabia and Iran. After the war began, Saudi Arabia cut its oil production by half. This decision caused the price of crude oil to soar on the international market. However, the UAE is withdrawing, stating that its decision to increase oil production cannot be implemented due to OPEC's strict quota system, which will invariably be an obstacle to its economic growth.

The UAE already has the capacity to produce 4.8 million barrels of oil per day. The UAE has the capacity to increase this and implement it without much delay. The world is rapidly looking for alternative energy sources. It is not possible to say how long the oil demand will remain the same. With this prescient knowledge, the UAE might be on the right path in believing that it needs to produce more. It is now being assessed that the UAE's decision will be beneficial for India, the world's third-largest oil importer. More fuel can be purchased in UAE dirhams. Even an oil pipeline project can be implemented. But all this will depend on the settlement of the Middle East conflict.