UAE to Exit OPEC and OPEC+ on May 1, Shaking Global Oil Markets

The United Arab Emirates announced on April 28 that it will formally withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the broader OPEC+ alliance effective May 1, a move expected to weaken the cartel's grip on global crude supply and intensify regional competition with Saudi Arabia.

UAE Energy Minister Suhail bin Mohammed Al Mazrouei said global energy demand is expected to continue rising and that the world will require greater energy supplies in the years ahead. He said leaving OPEC and OPEC+ would give the UAE greater flexibility to work with partners and investors while ensuring future global demand is met across crude oil products, petrochemicals, natural gas and other energy sectors.

The decision marks a major shift in global energy markets as the UAE, long regarded as OPEC's third-largest producer after Saudi Arabia and Iraq, seeks to pursue an independent long-term energy strategy and gain full control over production capacity and pricing.

UAE's Strategic Energy Expansion

The UAE currently produces around 3.2 million barrels per day of crude oil and liquids and has been one of OPEC's core production pillars.

The country holds an estimated 97.8 billion barrels of proven oil reserves, ranking seventh globally, and around 5.9 trillion cubic meters of natural gas reserves, ranking ninth worldwide. Combined, its reserves account for roughly 5.6% of global oil reserves.

Most of the UAE's oil and gas resources are concentrated in Abu Dhabi, where state-owned Abu Dhabi National Oil Company (ADNOC) dominates the entire value chain, including exploration, development, storage, transportation and exports.

The UAE plans to continue expanding crude production capacity through 2027 to secure a larger share of global energy supply. It is also aggressively increasing liquefied natural gas output, with plans to raise annual LNG production capacity from 77 million tonnes to 126 million tonnes, positioning the country as one of the world's key contributors to future natural gas and LNG supply growth.

OPEC's Influence Continues to Erode

Founded in 1960, OPEC once had 13 member states at its peak. Following multiple departures over the years, the group is expected to have only 10 core members by May 2026.

With the exits of major producers such as the UAE and Angola, OPEC's ability to control global crude supply and oil prices is increasingly weakening.

'OPEC+' consists of 12 major OPEC members and 10 major non-OPEC oil-producing allies that coordinate production and pricing policies.

According to the International Energy Agency (IEA), OPEC+'s share of global crude production fell from around 48% in February to 44% in March amid supply disruptions in the Gulf. The share may decline further in April as outages intensify and could fall again in May after the UAE's departure as OPEC+'s fourth-largest producer.

History of OPEC Member Exits

Several countries have left OPEC in recent decades as national energy priorities shifted:

• Indonesia: exited in 1995 and permanently withdrew in 2016 after becoming a net oil importer due to declining domestic production.

• Qatar: left in January 2019 to focus on natural gas and reduce reliance on crude oil.

• Ecuador: exited in January 2020 due to fiscal pressures and dissatisfaction with production quotas.

• Angola: announced withdrawal in December 2023 and formally exited in January 2024 over quota disputes.

• United Arab Emirates: to formally exit on May 1, 2026, to remove production limits and independently expand output.

Oil Prices Retreat After UAE Announcement

International oil prices gave back part of earlier gains on April 28 after the UAE announced its withdrawal from OPEC and OPEC+.

Al Mazrouei said he does not expect the announcement to have an immediate major market impact because exports through the Strait of Hormuz remain restricted.

However, once Gulf export flows normalize, the UAE's exit could allow the country to ramp up production beyond OPEC quotas, potentially increasing supply and putting downward pressure on prices.

Analysts say the move raises broader questions over whether Saudi Arabia can continue serving as the market's primary stabilizer in the long term.

Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB, said the move opens the door for the UAE to expand its global market share once geopolitical tensions ease.

Jorge Leon, an analyst at consulting firm Rystad Energy, said the UAE is one of the few OPEC members besides Saudi Arabia with significant spare capacity to bring more oil to market.

'Once outside the group, the UAE has both the incentive and the capability to increase output,' Leon said. 'That raises broader questions about whether Saudi Arabia's role as the market's central stabilizer can be sustained over time.'

A Win for Trump?

The UAE's exit is being viewed by some as a political victory for U.S. President Donald Trump.

In a 2018 speech at the United Nations General Assembly, Trump accused OPEC of 'ripping off the rest of the world' by driving up oil prices.

Trump has also linked U.S. military support for Gulf states to oil pricing, arguing that Washington provides security guarantees while OPEC members exploit consumers through high prices.

Analysts say lower oil prices could benefit consumers and support broader economic growth.

UAE-Saudi Rift Deepens

The UAE and Saudi Arabia have long been close allies, but competition between the two has increasingly surfaced in recent years over oil policy, regional geopolitics and efforts to attract foreign talent and investment.

The UAE is the region's leading commercial and financial hub and one of the United States' closest allies in the Middle East. It has pursued a more assertive foreign policy and expanded its influence across the Middle East and Africa.

Following attacks linked to tensions with Iran, the UAE strengthened ties with the United States and Israel. In 2020, it normalized relations with Israel under the Abraham Accords, a move seen as enhancing its regional influence and giving it a unique diplomatic channel with Washington.

The UAE's departure from OPEC marks one of the most significant structural shifts in the global oil market in years, potentially accelerating the fragmentation of producer alliances and reshaping future oil pricing power.