Oil churn: How the UAE's exit from Opec may benefit New Delhi

Subscribe to enjoy similar stories.The UAE's exit from the global oil cartels may be good for India, the world's third-largest oil buyer, sector experts said.The exit comes at a time when the Organization of Petroleum Exporting Countries (Opec) has been trying to cap production amid a global oil crisis. The UAE decision may weaken Opec's control over oil prices and result in more energy purchases by India, experts said."This decision aligns with the UAE’s long-term strategic and economic vision and the evolution of its energy sector, including accelerating investment in domestic energy production, while reinforcing its commitment to its role as a responsible and reliable producer looking to the future of global energy markets," the Emirates' energy ministry wrote on X.

The decision takes effect on 1 May.For long, India has been demanding an increase in production by Opec countries to achieve energy security and affordability. While Opec accounts for around 40% of India's oil needs, UAE accounts for around a tenth of India's overall oil imports.

India is a net energy import with 90% of its oil requirement being imported.Sourav Mitra, partner, oil and gas, Grant Thornton Bharat said the UAE's exit is likely to increase global oil supply flexibility in the medium term as the Emirates would be free from Opec mandates which could soften crude prices. "It is likely to be beneficial for India’s import bill and inflation in that sense.” However, in the short term, such events typically lead to market volatility and geopolitical uncertainty, requiring India to strengthen supply diversification and bilateral energy ties, he said.Deepak Mahurkar, partner, oil and gas at PwC India said the UAE move may be seen as an "opportunity"