The United Arab Emirates (UAE) announced its sudden withdrawal from the Organization of the Petroleum Exporting Countries (OPEC) and OPEC+ on Tuesday (April 28th). This move comes amidst the historic energy shock triggered by the U.S.-Iran war, impacting the over 60-year-old oil export organization.
OPEC is primarily composed of Gulf oil exporting countries that have controlled global crude oil prices through production quota mechanisms for decades. Since the oil crisis of the 1970s, the organization has profoundly influenced global energy policies. In 2016, OPEC allied with 11 non-member oil-producing countries led by Russia to form the broader OPEC+.
According to Rystad Energy data, the UAE has a production capacity of around 4.8 million barrels per day and significant room for increased production, indicating that it can better execute this strategy after breaking free from organizational restrictions.
Since the outbreak of the U.S.-Iran war, global oil prices have surged to as high as $119.50 per barrel. On Tuesday, prices rose by 3% to approximately $111. The UAE stated that it would provide additional production capacity to the global oil market in a “gradual and cautious manner that aligns with demand and market conditions.”
Experts analyze that the UAE’s exit from OPEC is a significant event that could reshape the global energy landscape, with its impact reflected in three key aspects:
1. The UAE possesses the world’s second-highest remaining production capacity, positioning it as the second most important “swing producer” within OPEC after Saudi Arabia.
2. BBC analysis highlights that in the past, the UAE’s ability to increase production has been a crucial tool in alleviating price spikes during periods of tight global supply. Losing the UAE means OPEC loses a key market-regulating lever.
3. Experts point out that the UAE has invested heavily in expanding production capacity, aiming to raise output to 5 million barrels per day. However, the country has long been constrained by OPEC’s 3-3.5 million barrel quotas. The UAE’s withdrawal marks a significant turning point for oil-producing countries.
Jorge Leon, Geopolitical Analysis Director at Rystad Energy, told The Guardian, “Losing a member with daily production capacity of 4.8 million barrels and aspirations for further expansions is tantamount to taking away a substantial tool from the organization.”
He further remarked, “As demand nears its peak, the calculus for low-cost oil-producing nations is rapidly changing; queuing within the quota system now looks like pushing the money out the door. Saudi Arabia now has to bear more responsibility for stabilizing prices alone, and the market has lost one of its last remaining buffering mechanisms.”
UAE Energy Minister Suhail Mohamed al-Mazrouei told Reuters that the decision was made after careful consideration of its own energy strategy. When asked if the UAE had discussed this with core OPEC country Saudi Arabia, he stated that the UAE had not raised the issue with any other country.
“This is a policy decision made after careful consideration of current and future policies related to production levels,” Mazrouei said.
CNN further points out that the UAE’s departure could trigger a “domino effect,” with other member countries seeking to increase production, such as Kazakhstan. Capital Economics states that this indicates the loosening of ties among OPEC member countries.
Analyses by Reuters and others suggest that this move is a victory for U.S. President Trump. Trump has long criticized OPEC for manipulating the world by raising oil prices. With OPEC headquartered in Vienna, its market influence has decreased in recent years as the U.S. has ramped up its crude oil production.
As one of the most critical allies of the United States in the Gulf region, the UAE’s exit disrupts the oil cartel’s price monopoly, aligning with Trump’s policy direction of promoting economic growth through lower oil prices.
While low oil prices benefit U.S. consumers, they pose concerns for U.S. domestic oil giants. CNN analysis suggests that the UAE’s release of production capacity could lead to long-term downward pressure on global oil prices, potentially eroding the profits of “Big Oil” and even forcing higher-cost shale oil producers to cut output.
Despite its massive energy production, the U.S. still needs to import crude oil due to refinery limitations. The weakening of OPEC’s influence, while diminishing the discourse power of hostile nations, also means the U.S. loses a collective negotiating partner for energy emergencies, making future energy diplomacy more complex.
BBC and The Guardian’s analysis suggests that the UAE’s actions indicate that the “oil era” may be entering the final stage before demand collapse.
As electrification advances, the UAE has adopted a proactive strategy: converting its remaining reserves into cash as quickly as possible before permanent demand contraction, funding its strategic shift toward a low-carbon economy.
The UAE is planning to build a new pipeline bypassing the Strait of Hormuz, connecting directly to Fujairah Port. This move aims not only to counter current threats from Iran but also to fundamentally change the Gulf’s reliance on a single shipping route, reducing the risk of geopolitical conflicts hijacking global supply chains.
Experts caution that while OPEC’s disintegration may lower average oil prices in the long run, it also means the market loses the collective production cuts as a “buffer” against supply surpluses. The future of global oil prices may bid farewell to “artificial stability,” entering a new phase driven more directly by market supply and demand dynamics and geopolitical conflicts.