-- Global oil benchmarks surged on Tuesday as the UAE announced its historic withdrawal from OPEC, fracturing the alliance as a dual blockade in the Strait of Hormuz pushed transit levels to near zero.
Front-month West Texas Intermediate crude futures gained 3.9% to $100.18 per barrel, while Brent futures were up 2.9% to $111.35/bbl.
In a heavy blow to the global oil cartel, the UAE withdrew from the group on Tuesday. The UAE's exit, effective May 1, marks a major strategic break from Saudi Arabia.
"In the medium term, the market should be able to absorb additional UAE barrels given depleted global inventories and the need to rebuild reserves," Saxo Bank analysts said.
"Over time, however, the departure raises a broader strategic question: if other producers begin prioritizing market share over quota discipline, OPEC's ability to manage orderly markets through coordinated supply adjustments may increasingly be called into question," they added.
State media confirmed the decision followed an internal review of domestic production and future capacity.
"The UAE's decision to exit from OPEC reflects a policy-driven evolution aligned with long-term market fundamentals," posted Suhail Mohamed Al Mazrouei, the UAE's Minister of Energy, on social media.
Meanwhile, market tension remains high as the US and Iran continue a military standoff that has effectively shuttered the Strait of Hormuz.
Despite reports that the Trump administration is reviewing a new Iranian counterproposal to lift the blockade, no progress toward reopening the waterway has materialized.
Analysts say that the persistent supply squeeze is now spilling over into refined products, with diesel and jet fuel prices hurtling toward $200/bbl, fueling global frustration over the war's mounting economic toll.