The United Arab Emirates has decided to withdraw from the OPEC and OPEC+ formats. The decision will come into effect on May 1, ending Abu Dhabi's OPEC membership, which has continued since 1967.
The editorial office reports, citing Reuters and AP, that the decision was announced via the UAE's state agency WAM. OPEC is the Organization of the Petroleum Exporting Countries, while OPEC+ is a broader production agreement that includes Russia and other major producers in this group.
The UAE explained its decision by a review of its production policy, existing and future production capacities. The official statement indicated that the move is related to the country's national interests and its desire to respond more flexibly to the demands of the global market.
This decision is not an ordinary diplomatic gesture for the global oil market. The UAE was considered one of the few countries within OPEC with real additional production capacity. This means Abu Dhabi was not just a member country, but one of the key players with the ability to bring additional oil to the market.
The main blow is to OPEC's internal order. This organization's influence on the market is built on members coordinating production. If the UAE now moves beyond these restrictions, OPEC's ability to manage prices through production quotas could weaken.
For Saudi Arabia, the issue is more sensitive. OPEC and OPEC+ effectively operated under Riyadh's leadership. The UAE's exit indicates that disagreements within the Gulf regarding energy policy, regional security, and economic priorities can no longer be contained within the organization.
In the short term, this move could create additional volatility in oil prices. If the UAE independently increases production, this could bring additional supply to the market and put downward pressure on prices. However, with tensions continuing around the Strait of Hormuz, the actual delivery of additional production to the market is a separate problem.
The Strait of Hormuz is a strategic maritime passage located between Iran and Oman. According to the U.S. Energy Information Administration, an average of 20 million barrels of oil and petroleum products passed through this strait daily in 2024. This accounts for approximately 20 percent of global liquid fuel consumption.
Therefore, the UAE's exit from OPEC could have two different effects. On paper, this means more oil production and freer competition in the market. In practice, however, as long as war and shipping risks continue in the region, the main issue will not be how much oil is produced, but its safe delivery to the global market.
The region most likely to be affected is Asia. China, India, Japan, and South Korea are heavily dependent on Gulf oil. A large portion of crude oil and condensate flows passing through Hormuz goes to Asian markets. For this reason, the UAE's decision creates a new risk not only within OPEC but also in Asia's energy security calculations.
For the US, this decision might appear politically advantageous. Washington has long accused OPEC of artificially keeping prices high. The UAE's exit from the cartel could weaken OPEC's collective influence over the market and make US oil and gas exports more attractive.
However, the ultimate outcome of the decision for the world is not yet clear. If the UAE shifts to an independent production policy and brings more oil to the market, price pressure could decrease in the medium term. If this move creates new fragmentation within OPEC, the market will enter a less predictable and more politically charged phase.
The conclusion is simple: the UAE's exit from OPEC is not just a withdrawal from an oil agreement. It could be an open signal to Saudi leadership in the Gulf, a blow to OPEC's market discipline, and the beginning of a more fragmented era in the global energy system.