The UAE's shock OPEC exit is not without precedence. Who could be next?
The UAE's exit from OPEC highlights growing tensions within the group as member nations with expanded production capacity resist output quotas. Analysts suggest Kazakhstan, Nigeria, and Venezuela could follow, driven by overproduction, domestic refining ambitions, or recovering output. OPEC+ faces challenges to cohesion, with some members exempt from quotas and others frustrated by non-compliance, potentially increasing oil market volatility. Despite fragmentation, OPEC+'s role in stabilizing markets during past crises suggests ongoing relevance.
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At the heart of the UAE's decision lies a familiar tension: members that have invested heavily in boosting production capacity are increasingly reluctant to be constrained by quotas designed to support prices.The country pumped about 2.37 million barrels per day in March, compared with its sustainable capacity of roughly 4.3 million bpd, according to latest IEA data.'Flight risks'Analysts pointed to several potential "flight risk" countries, chafing at OPEC+ restrictions, that could consider giving up their memberships.Matt Smith, lead oil analyst at Kpler, flagged Kazakhstan as a key candidate, noting its persistent overproduction.
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