UAE exits OPEC

Kim Khan· Host0:00

[instrumental music] Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Tuesday, April twenty-eighth, and I'm your host, Kim Khan. Our top story so far: The United Arab Emirates said it will exit OPEC and OPEC Plus effective May first, a surprise move that caught the oil market off guard. In a statement, the UAE's Energy Ministry said the decision followed a comprehensive review of its production policy and future capacity, and it was based on our national interest and our commitment to contributing effectively to meeting the market's pressing needs. The government said it seeks greater flexibility in managing oil output. OPEC membership requires adherence to collective production targets, which can constrain individual capacity. The UAE has expanded its production capacity to nearly five million barrels per day and is aiming to utilize more of that output outside OPEC quotas. Additional supply could reach as much as one million barrels per day. Gregory Bru, senior analyst for Iran and oil at Eurasia Group, said the move reflects a broader breakdown in oil market stability. He declared the Carter Doctrine essentially dead, noting that tankers are being seized or attacked on open seas, OPEC members are breaking off to produce what they want, SPRs are being drained. "Any and all forces that were able to produce market stability are falling by the wayside," Bru added. Among active stocks, shares of OpenAI partners SoftBank Group and Oracle are under pressure after The Wall Street Journal reported that the maker of ChatGPT recently missed internal targets for sales