UAE announces it is leaving OPEC

The UAE has announced that it will leave OPEC, and the wider OPEC+ group, from May 1, following five decades as a member of the oil producers’ consortium. The statement issued by the Ministry of Energy & Infrastructure reaffirmed the UAE’s commitment to stable oil markets, stating that it would ‘continue working with partners to support stable global energy markets’, and that its ‘production policies will be guided by responsibility and market stability.’ The statement noted that the war in the Gulf continued to effect supply dynamics in the near term but maintained that the long-run trend was for greater oil demand. A social media post by ADNOC managing director and group chief executive Dr Sultan Al Jaber said that the decision was ‘in line’ with the UAE’s ‘long-term energy strategy, its true production capability, and its national interest, as well as global energy market stability.’ While the ongoing closure of the Strait of Hormuz will limit any growth upside from the decision in the near-term, the decision to leave OPEC could pave the way for stronger oil GDP growth and increased revenue in future given the UAE will no longer be constrained by production quotas from the group.

Abu Dhabi Customs has announced a 36% rise in non-oil trade in the emirate in 2025, rising to AED 4154bn, up from AED 306bn in 2024. Non-oil exports rose by 63% to AED 175.4bn, imports rose 22% to AED 170.4bn, and re-exports were up 20% to AED 70bn.

Industrial production in India rose 4.1% y/y in March, down from 5.1% the previous month but notably stronger than the consensus prediction of 2.7% growth. Infrastructure/construction goods were up 6.7%, consumer durables 5.3%, and capital goods 14.6%, lagged by 3.3% growth in intermediate goods and 1.1% in consumer non-durables.

Today’s upcoming data and events

16:00 Germany CPI inflation, % y/y, April. Forecast: 2.9%

16:30 US durable goods orders, % m/m, March. Forecast: 0.5%

17:45 Bank of Canada rate decision. Forecast: 2.25%

10:00 US FOMC rate decision, upper bound. Forecast: 3.75%

Fixed Income

• USTs sold off yesterday as oil prices rose, with yields rising across the curve. The 2yr climbed 4bps to 3.8360%, while the 10yr saw a more modest 0.6bps rise to 4.3455%.
• The US Federal Reserve is set to announce its latest policy rate decision later today, with markets pricing zero chance of a cut. The meeting looks set to be Chair Jerome Powell’s last meeting in charge.

FX

• The US dollar climbed yesterday as uncertainty over the duration of the US-Iran war continued, snapping a couple of days of losses. The dollar index closed up 0.2% on the day.
• EUR closed down 0.1% to 1.1712, while GBP closed at 1.3517, also down 0.1%. JPY was also weaker by 0.1% at 159.62.

Equities

• Equity markets weakened yesterday amid higher oil prices and general risk-off sentiment. In the US, the Dow Jones closed 0.1% lower, the S&P 500 fell 0.5%, and the NASDAQ dropped by 0.9%.
• Locally, the DFM closed 0.2% lower while the ADX added 0.1%. Saudi Arabia’s Tadawul also added 0.1%.

Commodities

• Oil prices rose again yesterday despite the news that the UAE would be leaving OPEC and OPEC+ from May 1, as uncertainty around the peace process between the US and Iran continued. Brent futures closed up 2.8% on the day to USD 111.3/b, while WTI added 3.7% to USD 99.9/b.