UAE to exit OPEC, signaling shift in global oil dynamics

DUBAI, United Arab Emirates — The United Arab Emirates announced Tuesday that it will withdraw from the Organization of the Petroleum Exporting Countries (OPEC) effective May 1, a move expected to reshape the balance of power within the oil-producing alliance and influence global supply strategies.

The decision removes OPEC’s third-largest producer and comes amid longstanding tensions over production quotas. The UAE has repeatedly expressed dissatisfaction with limits it viewed as restrictive, particularly after investing heavily to expand its production capacity.

Analysts said the withdrawal reflects the country’s strategic push to maximize output. According to Capital Economics, the UAE has sought greater flexibility to increase oil production, signaling a broader loosening of cohesion among OPEC members. The bloc has already seen a departure in 2019 when Qatar exited.

Geopolitical considerations are also a factor. Relations between the UAE and Saudi Arabia, OPEC’s leading producer, have cooled in recent years amid differing political and economic priorities in the Middle East. Despite cooperation in past regional conflicts, including operations linked to Iran, the two Gulf states have increasingly diverged on key issues.

Market analysts do not expect immediate disruptions following the UAE’s exit. Global oil supply remains constrained due to ongoing conflict involving Iran, which has led to the closure of the Strait of Hormuz, a critical transit route for roughly one-fifth of the world’s oil. Benchmark Brent crude prices traded above $111 per barrel on Tuesday, significantly higher than pre-conflict levels.

OPEC currently accounts for about 40 percent of global oil production, though its influence has declined in recent years as the United States expanded output. U.S. production has surpassed 13 million barrels per day, exceeding that of Saudi Arabia prior to the conflict.

U.S. President Donald Trump has consistently criticized OPEC’s role in influencing oil prices during his time in office.

The UAE, which joined OPEC in 1967 through the emirate of Abu Dhabi, had been producing approximately 3.4 million barrels per day before the outbreak of hostilities on Feb. 28. It is estimated to have the capacity to increase production to around 5 million barrels daily.

In a statement released via its state-run news agency, the UAE said it would also leave the broader OPEC+ alliance, a grouping that includes major producers such as Russia. The country emphasized that its decision aligns with long-term economic priorities and its evolving energy strategy.

“The decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile,” the statement read, adding that increased production would be introduced gradually based on market demand.

Energy analysts noted that the UAE’s departure removes one of the few OPEC members capable of rapidly increasing output. Jorge Leon of Rystad Energy warned that reduced spare capacity within the group could make it more difficult to stabilize prices.

Tensions between the UAE and Saudi Arabia have also extended to economic competition and regional influence, particularly around the Red Sea. While both countries once collaborated in Yemen, their partnership deteriorated late last year following disputes over military actions and political alignments.

Further signs of strain have emerged in the media sector, with Saudi broadcasters scaling back operations in Dubai and relocating to the kingdom.

Karen Young of Columbia University Center on Global Energy Policy said the UAE’s exit underscores its desire for greater autonomy in dealing with key energy consumers, including China, while also positioning itself more competitively against Saudi Arabia.

Despite speculation of a rift, UAE Energy Minister Suhail al-Mazrouei said the move was not driven by conflict with Saudi Arabia, emphasizing continued mutual respect between the two nations.

Diplomatic signals, however, suggested some distance, as the UAE was represented by its foreign minister rather than its head of state at a Gulf leaders’ meeting in Jeddah hosted by Crown Prince Mohammed bin Salman.

The UAE previously hosted the COP28, where nearly 200 countries committed to transitioning away from fossil fuels. Nevertheless, the country continues to pursue expanded oil production alongside investments in renewable energy, a dual-track strategy that has drawn criticism from climate advocates.

Speaking at an energy conference in Abu Dhabi, U.S. Interior Secretary Doug Burgum downplayed the concept of a traditional energy transition, arguing instead that global demand will continue to rise.

The UAE’s departure from OPEC marks a significant turning point for the cartel, raising questions about its future cohesion and its ability to manage global oil supply in an increasingly fragmented energy landscape.