The UAE’s decision to leave Opec and Opec+ from May 1 could change how crude is priced, supplied and negotiated, especially for import-dependent economies like India. But the impact will not be simple: cheaper oil is possible later, while short-term volatility remains a real risk, explains Saurav Anand
l Why is UAE’s exit from Opec important?
THE ORGANISATION OF the Petroleum Exporting Countries (Opec) and Opec+ (this includes several non-Opec countries led by Russia) manage oil prices by controlling how much crude oil member countries produce. The United Arab Emirates (UAE) has been part of Opec for nearly six decades, so its exit weakens one of the world’s most powerful oil groupings. The UAE has 4.8-5 million barrels per day of production capacity, but its output has been restricted by Opec+ quotas.
The UAE has said it will exit from May 1, calling the move part of its strategic energy policy. In simple terms, it wants more freedom to pump and sell oil. For Opec, this is a loss because the group works only when members agree to hold back supply. If a large, low-cost producer walks away, the cartel’s ability to defend high prices becomes weaker.
Opec+ controlled over around 50% of the world’s total oil production in 2025, according to the International Energy Agency. With the UAE’s exit, the group will see its share of global oil supply fall to around 45%.
l Will crude oil prices fall now?
NOT IMMEDIATELY. IN the short term, the oil market is still being driven by West Asia tensions and disruption risks around the Strait of Hormuz, one of the world’s most important energy routes. That is why prices may remain volatile even after UAE’s exit. HSBC has also indicated that near-term impact may be limited because Gulf shipments are already affected by Hormuz-related disruptions.
However, once shipping normalises, the UAE could gradually raise output beyond its earlier quota. If it moves from around 3.4 million barrels per day toward 4.5–5 million barrels per day, that can add meaningful supply to the market. Over time, higher supply usually puts downward pressure on prices. Oil prices remain elevated and on Wednesday Brent crude rose to nearly $115 a barrel, compared to around $73 before the war began.
l What does this mean for India’s fuel bills?
INDIA IMPORTS OVER 85% of its crude oil requirement, so any fall in global prices helps. Cheaper crude can reduce India’s import bill, ease pressure on the rupee, and soften inflation because diesel and petrol costs affect transport, food and manufacturing.However, India will not see an instant benefit.
First, global prices must actually fall. Second, refiners need stable shipping and predictable supply. Third, the crude grade must suit Indian refineries. The UAE is an important supplier, but India’s imports from the UAE are generally around 400,000–500,000 barrels per day, less than 10% of total refinery throughput. So the imports from the UAE matter, but they do not dominate India’s crude basket.
l Can India simply buy more UAE crude?
NOT FULLY. THIS is where the story becomes more technical but important. A significant part of the UAE crude supply has historically been light sweet crude. Indian refineries, however, are largely high-conversion, “bottom-of-the-barrel” complexes designed to process medium and heavy sour crude more profitably. These refineries use units like cokers and hydrocrackers to extract higher value from heavier crude.
So even if the UAE pumps more light crude, India may not absorb all incremental volumes. Indian refiners can also buy comparable light sweet crude such as WTI, often at competitive prices and with flexible logistics. Unless the UAE expands medium sour crude production, its ability to sharply grow market share in India may remain limited.
l What’s the strategic impact for India?
THE BIGGEST OPPORTUNITY for India is bilateral energy diplomacy. Outside Opec, the UAE may have more flexibility to offer long-term contracts, customised pricing, and possibly expand rupee-based energy trade. Increased exports to India through the strategic Fujairah pipeline, which bypasses the Strait of Hormuz entirely, is a distinct possibility.
Reports say India-UAE oil-for-rupee trade could gain momentum if the UAE becomes more independent in its supply strategy.But there is also a risk.
A weaker Opec means less coordinated supply management. That can mean lower prices in good times, but sharper volatility during crises.
For India, the smart response is not dependence on one supplier. It must deepen ties with the UAE while continuing to diversify crude sources, build strategic reserves, secure LNG contracts, and accelerate domestic clean-energy capacity.
The UAE’s exit is therefore not a simple “good news” or “bad news” moment for India. It is a market reset. India may gain from softer prices and stronger UAE ties, but only if it manages refinery economics, supply risk and geopolitical volatility carefully.