UAE to Exit OPEC and OPEC+ as Strategic Shift Shakes Global Oil Market

The United Arab Emirates will leave OPEC, the decades-old cartel of the world’s top oil exporters, delivering a shock that will ripple through global oil markets at a time of unprecedented turmoil caused by the Iran war.

The UAE plans to withdraw from the Organization of the Petroleum Exporting Countries, or OPEC, on Friday, May 1, the state news agency WAM reported Tuesday. The decision also extends to OPEC+, a larger group that consists of other major oil producers such as Russia.

According to a statement from the news agency, the decision followed a comprehensive review of the UAE’s current and future production capacity and is based on national interest. The move will allow the UAE—one of OPEC’s top three producers—to break free from the output limits imposed by the cartel, whose de facto leader is Saudi Arabia.

OPEC quotas had most recently limited the UAE to 3.2 million barrels of production a day, despite having the capacity to produce closer to 5 million barrels a day. The potential additional supply amounts to around 1-2% of global oil demand, representing a significant shift for the producer group.

The implications for global energy markets will likely be limited in the short term given that the Strait of Hormuz remains largely shut. However, analysts suggest that once the strait reopens, global supplies will likely be higher than would otherwise have been the case under cartel restrictions.

The UAE’s departure will reduce OPEC’s control of global supply from around 30% to 26%. The decision reflects an intensifying focus on national interests among Gulf countries sparked by the current energy crisis and long-running tensions with Saudi Arabia over production limits.

UAE Energy Minister Suhail Al Mazrouei cast the move as a way to position the country as a leading producer at a time of growing concern about rising oil prices and tighter supply. He stated that taking the decision now will help producers manage market pressure without causing immediate price spikes due to current shipping constraints.

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