Oil Prices Drop Amid Rising Iran Sanctions and UAE Withdrawal from OPEC+

Oil Prices Decline After Consecutive Increases

Oil prices fell slightly on Wednesday, reversing direction after a series of increases that lasted several days, as markets assessed significant geopolitical and economic developments, notably the potential extension of U.S. sanctions on Iranian ports, along with the UAE's decision to withdraw from the "OPEC+" alliance.

Reports: Washington Prepares for Prolonged Sanctions on Iranian Ports

The Wall Street Journal reported, citing U.S. officials, that President Donald Trump has instructed his aides to prepare for the imposition of long-term sanctions on Iran.

This approach aims to increase pressure on the Iranian economy and reduce its oil exports by preventing shipping operations to and from Iranian ports.

Congestion of Iranian Oil Tankers Due to U.S. Restrictions

In this context, "Tanker Trackers" reported that about 10 Iranian oil tankers are congested off the port of Chabahar due to U.S. restrictions, reflecting the growing impact of the sanctions on oil supply movements.

Brent and West Texas Intermediate Prices Record Slight Decline

Brent crude futures for June delivery fell by 5 cents, or 0.04%, to $111.21 per barrel by 04:29 GMT, after recording increases for seven consecutive days, with the June contracts nearing expiration on Thursday.

Meanwhile, West Texas Intermediate crude futures for June delivery dropped by 57 cents, or 0.57%, to $99.36 per barrel, following a 3.7% increase in the previous session, achieving gains in seven of the last eight sessions.

Closure of the Strait of Hormuz Increases Draw from Global Stocks

The closure of the Strait of Hormuz continues to cast a shadow over energy markets, leading to an increase in draws from global stocks.

Data from the American Petroleum Institute showed that U.S. crude inventories fell by 1.79 million barrels during the week ending April 24.

Gasoline inventories also decreased by about 8.47 million barrels, while distillate stocks fell by 2.60 million barrels, reflecting ongoing pressures on supplies.

UAE Announces Withdrawal from OPEC and OPEC+ Effective May 2026

The United Arab Emirates announced on Tuesday its withdrawal from the Organization of the Petroleum Exporting Countries "OPEC" and the "OPEC+" alliance, with the decision set to take effect from May 1, 2026, according to the Emirates News Agency "WAM".

The UAE confirmed that the decision is part of its long-term strategic vision to develop the energy sector, focusing on accelerating investment in domestic production and enhancing its role as a reliable producer in global markets.

What is the OPEC+ Alliance and Its Impact on Oil Markets?

The "OPEC+" alliance is a strategic partnership established in 2016, comprising the 12-member OPEC organization along with 11 independent producing countries.

The alliance aims to stabilize global oil markets by managing production levels and coordinating among major producers.

UAE: The Decision Reflects National Interest and Energy Market Development

The UAE clarified that the withdrawal decision came after a comprehensive review of its production policy and current and future capabilities, aligning with national interests.

It also reaffirmed its commitment to contributing to global energy demand, despite ongoing geopolitical fluctuations in the Arabian Gulf, particularly in the Strait of Hormuz, which affect supply dynamics, at a time when forecasts indicate continued growth in global energy demand in the medium and long term.