As the crown prince of Saudi Arabia commenced a summit of Gulf Arab leaders, the UAE announced that it will be leaving the oil cartel OPEC and OPEC+ (an alliance of 11 member countries of OPEC and 10 major non-OPEC allies) effective on 1 May 2026, attributing the quotas set by OPEC curtailing their oil production as the main reason.

Abu Dhabi has invested in expanding their oil production capacity from 3.4 million barrels a day to 5 million by 2027.

The UAE is the third and fourth largest oil producer within each group, respectively. Their departure will impact around 12 per cent of OPEC’s output.

When asked whether the UAE consulted OPEC’s largest oil producer, Saudi Arabia, UAE energy minister Suhail Mohamed al-Mazrouei said they did not. He stated that the decision had, “nothing to do with any specific producer,” and that Saudi Arabia and the UAE are “brothers”.

“This is a policy decision. It has been done after a careful look at current and future policies related to level of production,” said the minister.

Al-Mazrouei also suggested that the country’s move would help meet the needs of increased energy demand globally.

Senior research strategist Michael Brown predicts oil prices are not expected to change in the short term due to blockades in the Strait of Hormuz impacting global oil supply, but it could accelerate the healing process and get the market back into balance.

A Declining OPEC?

OPEC stands for Organization of Petroleum Exporting Countries. It was established in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela for the purpose of “coordinat[ing] and unify[ing] the petroleum policies of its Member Countries and ensur[ing] the stabilisation of oil markets.”

OPEC has long played a crucial role in reshaping the power balance between oil producers and consumers whilst countering Western dominance, providing members more diplomatic and international weight.

“At the end of the day, Saudi Arabia was essentially OPEC—the only country with spare capacity,” said Gary Ross, a veteran OPEC watcher and CEO of Black Gold Investors. Saudi Arabia can produce up to 12.5 million bpd, but has kept production under 10 million in recent years.

The UAE has been a member since its federation was established in 1971, while Abu Dhabi joined in 1967. It has become the largest out of four other oil producers to depart OPEC, pumping 3 per cent of the world’s supply before the US-Israeli attacks on Iran curbed shipments and shut down productions.

The UAE's exit came as a shock, said five OPEC+ sources, who asked not to be named as they are not allowed to speak to the press.

The UAE’s departure will remove one of the few major swing producers in the group, diminishing OPEC’s ability to adjust global supply, and thus prices, and respond to changing market conditions in the long-run.

OPEC controlled over 50 per cent of global output in the 1960s, but as rival producing countries, such as the US, continued to invest in growing production of oil, the group’s share declined to around 30 per cent.

In the past 15 years, the U.S increased production of oil by 20 per cent, prompting the group to form OPEC+, led by Russia. This alliance allowed the group to return to its original 50 per cent share of the market, but the loss of the UAE’s means it will decline to around 45 per cent.

The Iran War and a Potential Trump Win

The unprecedented energy crisis caused by the Iran war shows OPEC producers are now struggling to ship exports through the Strait of Hormuz through which a fifth of the world’s crude and liquefied natural gas usually passes.

The crisis has also triggered some discord amongst Gulf Nations, potentially contributing to the UAE’s decision to leave the group.

"The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically," said Anwar Gargash, the diplomatic adviser for the UAE president.

"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," he said.

While the UAE distanced itself from Pakistan’s diplomatic resolution to the war, Saudi Arabia was a staunch supporter.

“Every Gulf state had its own policy of containment toward Iran, and all of those containment policies have failed,” Anwar Gargash, a senior Emirati official, said at a conference in Dubai on Monday. “All our policies have failed miserably.”

Gulf solidarity “was not at the level of the challenge” that the war presented, he said.

As the UAE drifts from Gulf Nations and becomes one of Washington’s most important allies, the country’s withdrawal from OPEC could benefit US President Trump who previously accused the organisation of “ripping off the rest of the world” in a 2018 address to the UN General Assembly.

Rising oil prices and inflation has been a major area of concern for the US president with mid-term elections coming up in November and his party at risk of losing seats.

President Trump has also linked US military support for the Gulf with oil prices, saying that while the US defends OPEC members they “exploit this by imposing high oil prices.”

A Faltering Relationship with the Gulf World

Tension between the Emirates and other Gulf nations, especially Saudi Arabia, far exceeds the Iran war and has had a lingering presence in the region for the past few years. Divergence on oil policy, growth rivalry and competing visions for security in the region has caused exponential rifts between the two countries.

Rumours of the country’s exit from OPEC have been circulating for the past five years as the UAE publicly differed from Saudi Arabia on how to manage oil policy ahead of the 2021 OPEC+ summit, complaining that OPEC quotas limited their oil production while Saudi Arabia wanted to maintain high prices by keeping output down.

While the Emirates—having a more diversified economy—favour strategies to maximise oil production to get ahead of energy markets moving away from fossil fuels, Saudi Arabia is heavily reliant on high oil prices to fund major infrastructure projects like Vision 2030.

“While Saudi Arabia aims to sustain oil markets for the next century, the UAE feels no such urgency,” said Bachar El-Halabi, senior analyst in Dubai for Argus Media, a commodities research firm.

Beyond oil policy, Saudi Arabia and the UAE have publicly drifted on other issues.

While in 2015, the two leaders Prince Mohammed of Saudi Arabia and Sheikh Mohammed bin Zayed once closely partnered to fight the Houthi rebels in Yemen, they have since diverged significantly on their vision for the country. The UAE supported an armed insurgency in Yemen, going against Saudi Arabia who backed the Yemeni government.

In Sudan, the Emirates continue to back a rival paramilitary group, the Rapid Support Forces, while Saudi Arabia supports the government. Emirati officials have denied sending weapons to the group despite extensive evidence to the contrary.

Meanwhile, as other Arab governments have maintained distance from Israel, the UAE has deepened their alliance with the state.

The Emirates’ move to pull away from OPEC demonstrates a willingness to make decisions based on its own interests rather than traditional alliances and conventions.

“It is an Emirati declaration of independence,” said Kristin Diwan, a senior resident scholar at the Arab Gulf States Institute in Washington.

“What we’re seeing today is like a new UAE,” said Abdulkhaleq Abdulla, an Emirati political scientist. “This is how the UAE will be behaving and will be conducting itself regionally, globally.”

Image source: Karim Sahib