Iran War Economy

The United Arab Emirates has announced it will leave OPEC and the OPEC+ group, effective May 1. Analysts say this could lead to more volatility in the global oil market, as the UAE was one of the few OPEC members with the capacity to quickly increase production. The UAE's exit signals a shift in regional cooperation dynamics, and comes amid chilly relations between the UAE and Saudi Arabia. While the announcement won’t have an immediate impact on world oil supplies that are constrained by the war in Iran and the closure of the Strait of Hormuz, it could help lower oil prices after the war if the UAE boosts its production capacity.

Iran’s national rial currency has hit a record low of 1.8 to the dollar as a shaky ceasefire with the U.S. and Israel holds. The rial had been stable for weeks during the war that began Feb. 28, partly due to limited trading and imports. Experts warn the fall of the rial is likely to further fuel inflation. Many imported goods, from food and medicine to electronics and raw materials, are affected by the dollar rate. The war is now in a ceasefire, but a U.S. naval blockade has continued to increase pressure on Iran’s already battered economy.