The UAE said on Tuesday it was quitting OPEC and OPEC+, dealing a blow to the oil-exporting groups

Oil prices rose on Tuesday as investors assessed the stalemate in the Iran war and news that the United Arab Emirates was cutting ties with OPEC, while concerns that the AI boom was losing momentum weighed ​on equity markets.

The UAE said on Tuesday it was quitting OPEC and OPEC+, dealing a blow to the oil-exporting groups and their de facto leader, Saudi Arabia, at a time when the Middle East war has caused a historic ​energy shock. Oil prices briefly pared gains on the news, but Brent was last hovering near a three-week high while WTI broke through $100 per barrel for the first time since April ​13.

The UAE leaving shows how tough it can be to keep a cartel together during tough times, said Brian Jacobsen, chief economic strategist at Annex ⁠Wealth Management. The UAE is OPEC’s third-largest producer and the quota it has is well below its capacity.

He said that even if the immediate reaction was muted, longer-term it gives OPEC a lot less sway over the markets.

U.S. bond prices also slipped, with yields up on concern over the effect of high energy prices on inflation.

Meanwhile, the U.S. president is unhappy with the ‌latest Iranian proposal on resolving the two-month war, a U.S. official said, dampening hopes for resolution of a war that has disrupted energy supplies and fuelling inflation. The war is at an impasse and energy supplies are still unable to transit freely through the Strait of Hormuz.

U.S. crude gained ​3.68% to $99.92 a barrel and Brent rose to $111.13 per barrel, up 2.68% on the day.