The United Arab Emirates announced that it will withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ alliance effective 1 May. Abu Dhabi said the decision reflects “national interests” and a “sovereign, strategic choice” that will give the emirate greater flexibility over its oil output.
The move comes as the Middle East faces heightened geopolitical tension following the U.S.–Israeli military action against Iran, which has disrupted crude flows through the Strait of Hormuz. The narrow waterway, adjacent to the UAE, normally carries about 20 percent of global oil shipments. Blockades and security concerns have constrained exports from the Persian Gulf.
UAE officials have long argued that OPEC production quotas limit the country’s ability to fully utilise its expanding capacity. Under the current OPEC agreement the emirate’s output is capped at roughly 3‑3.5 million barrels per day (bpd), while its stated capacity stands at 4.85 million bpd, with a target of 5 million bpd by 2027. By leaving the cartel, the UAE hopes to increase production once the supply disruptions ease.
The United Arab Emirates joined OPEC in 1967 and has, until now, been a key member of the OPEC+ framework created in 2016, which also includes non‑OPEC producers such as Russia, Kazakhstan, Oman and Mexico. OPEC now consists of 12 members, while OPEC+ adds 10 additional producers, bringing the total to 22. Over the past decade, other countries—Angola, Ecuador, Indonesia and Qatar—have also exited OPEC for various reasons.
Analysts estimate that the UAE’s departure removes about 13 percent of OPEC’s total production capacity and roughly 9 percent of the broader OPEC+ capacity, according to the International Energy Agency. The loss is expected to increase volatility in the near term but is unlikely to trigger an immediate price war. Remaining members are expected to review production quotas at their next meeting in June.
Oil markets were already under pressure from the Hormuz‑related disruptions. Brent crude was trading above $110 per barrel and U.S. West Texas Intermediate near $99 per barrel at the time of the announcement. Traders now face the additional uncertainty of an extra 2 million bpd of potential supply that could be added to the market if the UAE raises output outside OPEC limits.
The United States may view the development as strategically advantageous. Earlier administrations have criticised OPEC for influencing global oil prices, and a less coordinated producer bloc could give Washington greater leverage over individual exporters and benchmarks.
Founded in 1960 to coordinate production and stabilize prices, OPEC has been praised for mitigating market collapses during the 2008 financial crisis and the COVID‑19 demand shock. Critics argue that quota‑based management can distort markets. The UAE’s exit could further fragment the cartel, potentially leading to more unpredictable price movements and reduced collective control over supply.
The next OPEC+ meeting in June will address the UAE’s departure and its implications for future production targets and market stability.
