UAE’s shocking OPEC exit: Oil prices fall, Asian stocks rise<\/figcaption><\/figure>\n<\/div>\nFirst, it was the ongoing conflict in Iran that threatened global energy markets and now it is the UAE’s shock announcement of leaving OPEC that is further adding to the turmoil in the markets. <\/p>\n
Stock markets across Asia rose on Wednesday despite losses on Wall Street, but recent developments dragged down oil prices. <\/p>\n
Talking about American futures, there was an increase in them. The Kospi in South Korea rose 0.3 percent to 6.657.40. Hong Kong’s Hang Seng rose 1.4 percent to 26,029.02. <\/p>\n
The Shanghai Composite rose 0.3 percent to 4,091.01 on mixed results in Asian markets, while India’s Sensex also remained in positive territory with a gain of 0.4 percent.<\/p>\n
On the other hand, the S&P\/ASX 200 in Australia fell 0.3 percent to 8,689.50 and Taiwan’s TAIEX suffered a sharp decline of 0.6 percent. <\/p>\n
In contrast, oil prices, which had been rising since the beginning of the Iran conflict with the US, have declined. For example, Brent crude prices fell 0.5 percent to $110.71 on Wednesday morning. Benchmark US crude fell 0.6 percent to $99.32 a barrel.<\/p>\n
The significant changes in stock markets and the energy sector came after the UAE announced on Tuesday that it would withdraw from OPEC from May 1. The announcement has worried oil players and markets as the UAE is OPEC’s third-largest oil producer. About 40 percent of global oil production comes from OPEC. <\/p>\n
At the heart of UAE-OPEC tensions is Abu Dhabi’s resistance to OPEC production quotas in recent years, seeking to sell more oil to the rest of the world. <\/p>\n
According to Capital Economics, “Having invested heavily in expanding energy production capacity in recent years, the bigger picture is that the UAE is keen to pump more oil. The ties that bind OPEC members together have loosened.” <\/p>\n
Earlier in 2019, Qatar had withdrawn from the cartel. ING said the UAE’s departure would “reduce OPEC’s effectiveness in managing and influencing the global oil market through supply measures.”<\/p>\n<\/p><\/div>\n