The United Arab Emirates has announced it will exit the OPEC and OPEC+ oil group effective May 1. This is one of the most significant change in global energy politics in decades.
The UAE energy ministry said, “This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets.”
Why the UAE is leaving OPEC
The UAE’s decision can be seen from a lens of economic ambition and political divergence. As of February, the country was OPEC’s third-largest producer after Saudi Arabia and Iraq, producing around 2.9 million barrels per day. It joined OPEC in 1967 through Abu Dhabi and became a member as a unified country in 1971.
However, tensions have been building for years. The UAE has increasingly resisted OPEC-imposed production quotas, which limit how much oil it can produce. With billions invested in expanding capacity, targeting up to 5 million barrels per day, it wants the freedom to pump more and gain global market share.
As reported by Reuters, analysts say the UAE also wants to monetise its reserves faster as the world is changing towards cleaner energy. Leaving OPEC allows it to do that without restrictions. The country also has a lower oil price break-even point compared to Saudi Arabia, meaning it can withstand lower prices better.
The ministry added, “Following its exit, the UAE will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions.”
Growing rift with Saudi Arabia and regional tensions
The exit also shows the rift with Saudi Arabia. Once close allies, the two countries are now competing for foreign investment and regional influence, particularly as Riyadh pushes aggressive economic reforms under Crown Prince Mohammed bin Salman.
Security concerns have further strained ties. Emirati officials have expressed frustration over what they see as weak regional support against Iran amid ongoing conflict.
Diplomatic adviser Anwar Gargash said, “The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically. I expect this weak stance from the Arab League and I am not surprised by it, but I haven’t expected it from the (Gulf) Cooperation Council and I am surprised by it.”
At the same time, Gulf producers have been struggling to ship oil through the Strait of Hormuz, a critical chokepoint between Iran and Oman through which about a fifth of global oil and gas supplies pass, due to the war.
Impact on OPEC and global oil markets
Analysts believe the UAE’s exit could weaken OPEC’s ability to control oil prices and maintain unity. The cartel, founded in 1960 by Saudi Arabia, Iran, Iraq, Kuwait, and Venezuela, has long coordinated production to stabilise markets.
Jorge León of Rystad told Reuters, “The UAE withdrawal marks a significant shift for Opec. Alongside Saudi Arabia, it is one of the few members with meaningful spare capacity – the mechanism through which the group exerts market influence.”
He added, “While near-term effects may be muted given ongoing disruptions in the strait of Hormuz, the longer-term implication is a structurally weaker OPEC.”
With the UAE free to increase production, oil prices could face downward pressure over time. At the same time, this could lead to greater volatility as OPEC loses one of its most influential members.
Jan von Gerich of Nordea told Reuters that the exit may push prices lower, while Monica Malik of ADCB said, “This opens the door for the UAE to gain global market share when the geopolitical situation normalises.”
Ajay Parmar of ICIS also told, “The UAE has been in disagreement with general OPEC policy for quite some time. So it’s not a surprise, but it will certainly have a significant impact in the long term. It also signifies the general drift in the historically strong alliance between the UAE and Saudi Arabia.”
A changing global oil order and impact on US relationship
This is also being interpreted as a geopolitical win for Donald Trump, who has long criticised OPEC for inflating oil prices while benefiting from US security guarantees. Trump has accused the cartel of “ripping off the rest of the world” and linked US military support in the Gulf to oil pricing, arguing that countries exploit American protection while keeping prices high.
Analysts say the UAE’s exit could improve its relationship with Washington by distancing itself from OPEC’s pricing strategies and aligning more closely with Western energy and climate policies. It may also shield the UAE from potential US antitrust legislation targeting oil cartels. As demand growth slows and countries prepare for an energy transition, OPEC faces internal challenges, including members exceeding quotas and competing for market share.
According to analysts and reports, the cartel is already under strain, with rising production outside OPEC, weakening demand forecasts, and internal disagreements. Some experts believe this moment could mark the beginning of a long-term decline in OPEC’s influence.
A cartel that was already in crisis
According to a 2025 report by The Economist, OPEC+ may already have been facing a structural crisis even before the UAE’s exit. The group increased output by 411,000 barrels per day for three straight months, much faster than earlier plans, regardless of weaker demand forecasts and rising supply from non-OPEC countries. Although the cartel still supplies about half the world’s oil, its control over prices is weakening.
Several members have been exceeding production quotas, which weakens OPEC’s main system. The UAE, described as the group’s “biggest menace,” is suspected to be producing more than its official 2.9 million barrels per day, with some estimates putting it at 3.3–3.4 million barrels per day.
The report also says analysts often “massage” production numbers due to political pressure, Saudi Arabia is finding it harder to enforce rules. With global oil demand expected to peak in the future, countries are more focused on producing and selling oil now, which is further weakening the cartel.
Similarly, a research paper titled “Should Abu Dhabi Quit OPEC? Reconsidering the UAE’s Membership” by the Baker Institute for Public Policy lays out the financial and strategic trade-offs behind this move.
On the positive side, leaving OPEC could let the UAE produce oil at full capacity, earning an extra $50–70 billion each year by 2028, about 20% of Abu Dhabi’s GDP. The paper says this would help the UAE sell its oil faster before demand falls due to the global shift to cleaner energy, also supporting its plans to diversify the economy and reach net-zero goals.
The paper warns that an exit could trigger a Saudi-led price war, with Riyadh potentially flooding the market to drive prices down and reassert control. It also raises the possibility of regional retaliation, including trade or travel restrictions similar to the Qatar blockade, which could hurt the UAE’s position as a global business and tourism hub.
Additionally, leaving the cartel would mean losing the benefits of coordinated supply management, increasing exposure to oil price volatility. At the same time, the paper notes potential geopolitical advantages, including closer alignment with the United States, insulation from criticism over OPEC’s pricing strategies, and protection from possible “NOPEC” antitrust legislation targeting oil cartels.
In the short term, the impact may be small because supply is already disrupted and demand remains strong. But over time, the UAE’s exit could change oil markets, weaken OPEC, and increase competition between producers.
By producing more oil on its own, the UAE could earn billions more each year. However, it also risks sparking price wars or facing backlash from countries like Saudi Arabia