Opinion: Opinion | There's A Bigger Plan Behind UAE's Exit From OPEC – One In Force For Years Now

Yesterday, the UAE announced that it was quitting the Organization of Petroleum Exporting Countries (OPEC) and the wider OPEC+, with effect from May 1. For a while, this announcement, so consequential as it is, shifted international focus away from the Iran war. The UAE has been a member of OPEC since 1967, first through Abu Dhabi, the most oil-producing Emirate, and then since 1971 as the seven-emirate federation it is today. The UAE’s decision, while certain to trigger a chain reaction in the energy markets, will help keep oil prices down, as it will enable it to produce and export more crude, free from the cartel’s constraints. For India, this is good news, as not only is it closely aligned with the UAE on many issues, including energy, but also because of its geographical proximity to the Emirates.

One of the reasons for the UAE’s decision is, apart from not being constrained in its crude production, to also find buyers closer to it geographically. India is the closest, largest oil importer.

The Saudi Factor Is Just One Of The Reasons

The UAE’s decision is also demonstrative of its widening rift with the Kingdom of Saudi Arabia (KSA), the founding member and leader of OPEC. Both in quantitative and in terms of trade routes and corridors, the decision will be a challenge to the Saudis, while giving a freer hand to the Emirates and making them less dependent on the former. The current war has battered its economy, with Iran directing more missiles and drones at it than at any other country – including Israel, which, together with the US, started the war.

On a broader note, however, surprising as the UAE’s decision is, it is also fully in keeping with its strong resolve to forge an independent path for itself, grounded in strategic autonomy. This also translates to breaking with regional, in particular, Arab consensus on many issues. The most recent case in point is the report by Axios that during the war, Israel moved an Iron Dome battery and operating personnel to the UAE’s territory, which helped deflect many of the strikes launched on it by Iran. 

That Leaked Cable

But to understand what drives the UAE’s worldview, we need to step back in time. In 2005, according to a cable made public by WikiLeaks, Mohamed bin Zayed, or ‘MBZ’ as he is more commonly known, had told a United States ambassador, James Jeffrey, that his biggest concern was Wahhabism. It is this concern – coupled with, of course, geography – that has shaped much of the UAE’s current policies. 

MBZ, now the UAE’s President, is widely believed to have inherited his appreciation for diversity and religious tolerance from his father and the founder of the UAE, Zayed bin Sultan al-Nahyan. With time, he found political Islam – manifested best in the region through the ‘Muslim Brotherhood’ – to be incompatible both with that vision and with clan loyalty and leadership. Consequently, by 1994, the UAE became one of the first Arab countries to ban the Dubai branch of Islamist Jamiat-e-Islah, an Islamist group affiliated with the Muslim Brotherhood; a total ban was imposed 20 years later in 2014. 

In due course, a string of events vindicated the UAE’s view. 

Iran Revolution, 9/11, Mumbai Attacks

First were the twin events of 1979 – the Islamic revolution in Iran, and then the Soviet invasion of Afghanistan with the Afghan jihad that followed. Both upended the existing order, resulting in upheaval and chaos. The overthrow of the Shah put the Gulf monarchies on notice, leading to the formation of the Gulf Cooperation Council (GCC). On the other hand, the Afghan jihad plunged Afghanistan into chaos – something it has not recovered from even today, five decades later. 

Political mobilisation of any kind thus became anathema to the UAE. This was followed by the invasion of Kuwait by Iraq under Saddam Hussein, and the arrival of Hamas, the extended arm of the Muslim Brotherhood in Gaza, as well as Hezbollah, an Iranian proxy in Lebanon. The NATO wars in Afghanistan and Iraq followed, where the fall of the Saddam government paved the way for sectarian politics and greater Iranian influence there, extending into Syria.

However, two incidents that really spooked the UAE were the September 11 attacks in New York and the 2008 Mumbai attacks. If New York could happen – went the thinking – then such attacks could happen inside the Emirates too. Moreover, two of the attackers in the 9/11 were from the UAE. Soon, a number of arrests took place across the country. The Mumbai attacks, where the attackers came by sea, were also a warning for the Emirates, which has a long coastline.

Here Comes The Arab Spring

A pivotal moment came with the Arab Spring. The UAE, which had aligned itself closely with the US by then, procuring weapons systems from it and housing US bases on its territory, was deeply disappointed when America, which had for years supported the Hosni Mubarak regime in Egypt, signalled its acceptance of Mohammed Morsi as President when his Muslim Brotherhood party won at the polls. Together with neighbouring Saudi Arabia, the UAE expended considerable effort in seeking the removal of the Morsi government and backing military man Abdel Fatzh Al Sisi as President. This paved the way for the UAE’s active involvement in other conflict zones, specifically those that threatened to elevate Islamists to power. One example is post-Gaddafi Syria, where the UAE backed the anti-Islamist faction of Khalifa Haftar.

The most decisive intervention, however, was in Yemen in 2015, when Houthi militias, sponsored by Iran, overran the internationally recognised government of President Abdur Hadi Mansour. This came at a time when the US was busy negotiating the nuclear deal (the Joint Comprehensive Plan of Action) with Iran. The thought of a strong, emboldened, sanctions-free Iran, taking over yet another Arab country and jeopardising trade routes along the Gulf of Aden, was a nightmare the UAE did not want to see coming true. With Pakistan unwilling to intervene militarily, the UAE and Saudi Arabia, under a Saudi-led coalition, had to act. The UAE eventually withdrew from Yemen in 2019, after putting in place trained troops in Southern Yemen.

UAE Starts Looking To Russia, China, India

Amidst increasing US disinterest in the region under the Obama administration and the rise of political Islam in Tunisia, Turkey and Afghanistan, along with the growth of Islamist terror groups such as ISIS, the UAE began diversifying its strategic partnerships. It reached out to Russia, China, South Korea, and India. New Delhi was a natural choice given the historical linkages, the geographical proximity, the India-Gulf migration corridor, and India’s growing military and economic clout. The UAE even broke ranks with other Arab countries to recognise the reorganisation of Jammu and Kashmir in 2019 and played a behind-the-scenes role in the 2021 ceasefire between India and Pakistan. Over the years, the UAE has, in fact, become India’s closest friend and partner in the Arab-Muslim world. In contrast, in what is a first for Pakistan from any Gulf ally, the UAE has asked it to repay a loan amount of $3.5 billion.

The UAE thus asserted itself in different theatres, especially in regions where it saw political Islam rearing its head. At one point, it even supported the Iran-backed Bashar Al-Assad regime in Syria since Assad was actively battling Islamist terrorists. In 2017, together with Saudi Arabia and Bahrain, it imposed a blockade on Qatar for its support for Islamists and what it perceived as radical groups, such as Hamas, as also for its support for Turkey under the Islamist government of President Erdoğan. It has intervened in Sudan and Somalia, and again, breaking ranks with other Arab nations, became the first Arab and Muslim country to recognise the breakaway region of Somaliland.

The Abraham Accords – And After

But the boldest moment in this trajectory arrived in 2020, when it became the first Gulf country and only the third Arab country to establish diplomatic relations with Israel under the Abraham Accords facilitated by the first Trump administration. That paved the way for other Arab countries, such as Bahrain and Morocco, to normalise ties with Israel. The accords helped deepen economic, cultural, trade, investment, and intelligence cooperation between the UAE and Israel, which, as now revealed with the Iron Dome reports, extended to defence as well. But this has also brought the UAE’s Israel ties under scrutiny in the wake of the Gaza war. This is also perhaps why Iran made the UAE its biggest target in the current war, even when the former made diplomatic overtures to Iran over the recent past and had been a critical economic conduit to the world for its sanctions-hit economy.

A Success Story

Over the years, taking advantage of its oil wealth, the UAE has quickly transformed itself from a poverty-stricken country to a kind of Switzerland in the Gulf. Of all the other oil-rich states in the region, it is the UAE that has metamorphosed into a luxury tourist destination, an important trade and finance hub, a critical spoke in global transport and shipping logistics, as well as a tax haven. In preparation for a post-oil economy, it has been diversifying and focusing greatly on AI, hi-tech sectors, and renewables.

The decision to exit OPEC is, thus, part of this same continuum as the UAE seeks to navigate a tricky and difficult terrain, breaking free of regional and Arab constraints and forging an independent path for itself. In the process, however, it has ruffled quite a few feathers. The OPEC exit will, in all probability, be yet another challenge for it to overcome.

(The author is a senior journalist)

Disclaimer: These are the personal opinions of the author