Following its recent announcement, the United Arab Emirates intends to withdraw from the Organization of Petroleum Exporting Countries (OPEC) on May 1, marking a significant shift within the group, which currently consists of 12 oil producing countries, including Saudi Arabia, Iraq, Iran and Kuwait. The move comes at a time when regional trade flows continue to be disrupted by ongoing geopolitical tensions, and global oil markets continue to face limited visibility due to logistical constraints. In this context, market sources indicate that the UAE's decision reflects a growing preference for a more flexible and independent production strategy, with the country seeking to increase its production capacity and operate outside the group's quota system.
Although there has not been a clear impact on oil prices so far, as limited trade flows continue to shape market conditions, this development is expected to affect market dynamics in the coming period. In particular, the potential for additional supplies in the medium term may begin to put pressure on energy prices as soon as the current disruptions ease and trade flows return to normal. This, in turn, may create some opportunities to reduce production costs, which suggests a possible indirect impact on the steel market, although no clear effect has been observed at this stage.
"We do not expect an immediate impact at this stage, but oil prices may come under pressure over time, as the UAE has the ability to increase supply by about 20-25 percent," a market source told SteelOrbis.
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