Faisal Islam: Why the UAE's exit from Opec is a big deal

the uae abruptly left opec, ending a membership that predates the country itself. the emiratis joined before becoming a nation in 1971. opec quotas limited their production to 3-3.5 million barrels per day, and they felt they were making disproportionate revenue sacrifices. the uae had the second-highest spare production capacity in opec, making it a key swing producer. it wants to use that capacity — targeting 5 million barrels per day once its oil can get to market. new pipelines from abu dhabi to the port of fujairah are being discussed, bypassing the strait of hormuz. the timing hints at fallout from the iran war, straining uae relations with both iran and saudi arabia. saudi arabia could respond with a price war the uae's diversified economy might withstand, but poorer opec members might not. opec's share of internationally traded oil has fallen from 85% in the 1970s to about 50% today.