Oil Rises Above $110 after UAE Announces OPEC Exit
Oil prices rose on Tuesday (April 28th) and briefly surpassed $110 per barrel, though the price moved more moderately from intraday peaks, after the United Arab Emirates (UAE) announced its decision to withdraw from OPEC amid the US-Israel war with Iran, which has disrupted regional supply flows.
Brent rose above $111 per barrel, bringing its weekly gain to nearly 6%, while WTI traded around $100 per barrel. The relatively muted market response, with Brent briefly shedding about $2 before recovering, reflected already very tight physical market conditions.
The UAE announced it would withdraw from OPEC and the OPEC+ alliance effective May 1st as part of a long-term strategic and economic plan, according to state news agency WAM. Abu Dhabi said it would act "responsibly" and increase production gradually.
Prior to the announcement, oil prices were also boosted after US President Donald Trump held a meeting to discuss Iran's proposal to end the war while maintaining its "red lines," including preventing Tehran from acquiring nuclear weapons.
On the supply side, the market continues to price in the risk of prolonged disruptions, as traffic through the Strait of Hormuz is said to have fallen to near zero due to the Iranian and US blockade, despite a general ceasefire holding since early April. Tightening supplies and rising energy prices are heightening inflation concerns, leading market participants to monitor their impact on central bank policy expectations and the latest price projections from major financial institutions, which have begun to raise their estimates as global stockpiles continue to draw. (asd)*
Source: Newsmaker.id
