CURRENT AFFAIRS | INTERNATIONAL ORGS / ECONOMY | 29 APRIL 2026
CLAT GK + ECONOMY | OPEC | OPEC+ | Strait of Hormuz
In a seismic shake-up of the global oil order, the United Arab Emirates announced on 28 April 2026 that it will exit both OPEC and the broader OPEC+ coalition with effect from 1 May 2026 — ending nearly six decades of membership. The decision lands at the worst possible moment for Saudi Arabia: the Strait of Hormuz remains effectively closed amid the Iran war, OPEC has lost roughly 7.88 million barrels/day of involuntary production in March alone, and crude markets are already at multi-year highs. The UAE — second only to Saudi Arabia in spare capacity — has long chafed under quota discipline; with Hormuz constraining its own exports, Abu Dhabi appears to have judged that exit costs are at their lowest. For India — which imports ~85-88% of its crude — the development compounds existing supply-shock risks.
Background
OPEC was founded in Baghdad on 14 September 1960 by five countries — Iran, Iraq, Kuwait, Saudi Arabia and Venezuela — to coordinate petroleum policy and stabilise prices. Its headquarters shifted from Geneva to Vienna in 1965. OPEC+ was formed in December 2016 via the ‘Declaration of Cooperation’ that brought 10 non-OPEC producers — most importantly Russia — into a coordinated production framework. The grouping has used quota cuts to manage prices through the 2014 shale glut, the 2020 COVID demand collapse, and now the 2026 Iran-war supply shock. The UAE’s exit is the most consequential since Qatar left in January 2019 — and unlike Qatar, the UAE is a top-3 producer.
Key Facts at a Glance
- OPEC founded: 14 September 1960, Baghdad Conference.
- Founding 5: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela.
- HQ: Vienna, Austria (since 1965).
- OPEC+ formed: December 2016 — OPEC + 10 non-OPEC anchored by Russia.
- Strait of Hormuz width (narrowest): ~33 km; ~20% of world’s seaborne crude transits daily.
- Hormuz littoral: Iran (north) + Oman (south, via Musandam exclave).
- India’s crude import dependence: ~85-88%.
- India’s SPR sites: Visakhapatnam, Mangalore, Padur (Phase II adding Chandikhol & Padur-II).
Constitutional / Legal Framework
- Membership: OPEC has no founding treaty enforcement — exit requires a formal notification but is politically not legally constrained.
- India’s energy framework: Petroleum Act 1934, Oilfields (Regulation and Development) Act 1948, Petroleum and Natural Gas Rules.
- India is an IEA Association country (since 2017) — the IEA mandates 90 days of net-import coverage as a strategic stockpile.
- UNCLOS Article 38 — right of transit passage through international straits like Hormuz; bedrock of international navigational rights.
- India-OPEC link: India is NOT an OPEC member; major suppliers from OPEC+ include Saudi Arabia, Iraq, UAE (historically) and Russia.
CLAT Relevance
- GK trap: OPEC was founded in Baghdad (NOT Vienna — Vienna is the HQ since 1965). Founding members were 5 (NOT 7).
- Economy angle: Inelastic demand for crude + supply shock = sharp price spike → imported inflation, current account deficit pressure for India.
- Indian rupee link: 10% rise in crude → ~40 bps inflation impact → RBI rate-path implications.
- Geography integration: Strait of Hormuz, Bab-el-Mandeb (Red Sea), Suez, Malacca, Hormuz — practise the four major chokepoints.
- Recent context: OPEC has 12 members after Qatar (2019) and now UAE (2026) exit — useful 1-mark factual question.
Test Yourself
10 MCQs on OPEC, OPEC+, the Strait of Hormuz and India’s energy security:
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