What pushed the UAE out of OPEC, and how big is the blow to oil market control?

The Organization of the Petroleum Exporting Countries (OPEC) suffered a major setback on Tuesday after the United Arab Emirates announced it would exit the bloc and the wider OPEC+ alliance effective May 1.

The UAE said a shift in its “long-term strategic and economic vision” and its evolving energy profile, including increased investments in domestic production capacity, prompted the country to exit the oil cartel.

The country said the move reinforces its commitment to a “responsible, reliable, and forward-looking role in global energy markets”.

What is OPEC and OPEC+?

Founded in 1960 in Baghdad by Iraq, Iran, Kuwait, Venezuela and Saudi Arabia, OPEC was designed to coordinate petroleum policies and stabilise prices.

The UAE joined in 1967 through Abu Dhabi and remained a member after the federation’s formation in 1971.

Today, it includes 12 countries, largely from the Middle East and Africa.

In 2016, the group expanded into OPEC+, bringing in major non-OPEC producers like Russia to strengthen its influence over global oil supply.

OPEC+ accounted for nearly half of global oil and liquids output last year, according to the International Energy Agency.

The UAE is the fourth-largest producer within OPEC+, and its exit is expected to reduce the group’s control over global supply.

Why UAE chose to exit

The UAE’s exit follows years of friction with Saudi Arabia, the de facto leader of OPEC, over production quotas.

While Riyadh has pushed for strict supply discipline to support prices, Abu Dhabi has sought a higher production ceiling to reflect expanded capacity backed by a USD 150 billion investment programme.

The UAE’s current quota stood at about 3.5 million barrels per day (bpd), below its production potential.

Before recent disruptions linked to the West Asia conflict, it pumped roughly 3.4 million bpd, or about 3% of global supply.

Once outside OPEC+, the UAE will no longer be bound by coordinated production cuts and will gain flexibility to raise output in line with its capacity and market conditions.

Blow to OPEC’s influence

The UAE becomes the fourth country to leave OPEC in recent years, following Angola (2024), Ecuador (2020) and Qatar (2019), and by far the largest producer among them.

The departure could weaken OPEC+’s ability to manage supply and influence prices.

OPEC’s share of global oil output has already declined from over 50% in its early decades to about 30% now, amid rising production from non-member countries.

The United States, in particular, has emerged as a dominant producer, accounting for roughly 20% of global supply due to its shale boom.

The OPEC+ alliance, formed in 2016 with major non-OPEC producers including Russia, had helped restore some influence, controlling around 50% of global output in 2025.

With the UAE’s exit, that share could fall to about 45%.

Limited immediate market impact

HSBC said in a research note that global supply is unlikely to rise significantly in the near term due to ongoing disruptions in the Strait of Hormuz.

While the exports from the Gulf remain constrained, and the Abu Dhabi Crude Oil Pipeline is likely operating near full capacity.

The bank estimates that the Abu Dhabi National Oil Company could eventually raise production to over 4.5 million bpd, compared with an OPEC+ quota of about 3.4 million bpd for May 2026.

However, any increase is expected to be phased in over 12–18 months.

Geopolitical undercurrents

Both countries have also been competing to attract foreign investment, especially after Saudi Arabia opened up its economy under Crown Prince Mohammed bin Salman, challenging the UAE’s status as a regional business hub.

The ongoing conflict involving Iran has disrupted oil supply and exposed divisions among Gulf producers.

According to the International Energy Agency, the crisis has triggered one of the largest-ever disruptions to daily global oil production.

The UAE’s departure could complicate OPEC+’s efforts to maintain cohesion and enforce production discipline over time, potentially weakening its credibility in managing global oil markets.

Suniay Sudhir, former India’s Ambassador to the UAE, wrote in Hindustan Times: “The UAE's exit from OPEC is as much about oil as about the future of intra-GCC and intra-Arab relations.”

“OPEC's interests (read Saudi Arabia's) have ceased to align with Abu Dhabi's. Hit by Iranian missiles and drones more severely than Israel, the UAE has long chafed at the insipid response of its GCC and Arab partners,” he added.

The development may have indirect implications for India since OPEC-linked production cuts also affect Lower Zakum, an offshore field in which Indian companies hold a stake.