J.P. Morgan on Thursday said the UAE could attract greater investments from U.S. companies once it is in a position to pump more oil after the country decided to leave the Organization of Petroleum Exporting Countries group. The fourth-largest producer in OPEC said on Tuesday it would exit the group on May 1.
Key points from JPM’s note:
* The country’s decision carries no immediate practical implications for its ability to produce and sell more oil, as the Strait of Hormuz is blocked.
* UAE authorities aim to expand capacity to 5 million barrels per day by 2027, thereby increasing the ability to produce and export roughly 1.5 million bpd above current levels – equivalent to about 1.4% of global oil demand.
* The country accounted for more than 11% of OPEC’s 2025 output.
* OPEC’s ability to stabilise the market will be diminished, as UAE’s sizeable spare capacity will also be lost.
* Risk of Saudi Arabia and UAE priorities further widening
* UAE is a large creditor to Türkiye and Egypt, and others in the region and beyond; political rift is a risk for more pressure on other countries.
(Reporting by Noel John in Bengaluru; Editing by Harikrishnan Nair)