The United Arab Emirates has announced it will leave OPEC effective May 1, removing a producer of roughly 4.8 million barrels a day from the cartel. The move comes as the US-Israel war on Iran has cut OPEC output by about 7.88 million barrels a day in March, and after attacks and threats have clogged shipments through the Strait of Hormuz. Abu Dhabi’s state oil company says it plans to raise capacity from pre-war levels and act independently on production. The exit alters OPEC’s membership and reduces the group's immediate ability to present a united front on supply policy.

What happened

The UAE made a formal announcement in late April that it will withdraw from OPEC and OPEC+ and said the decision will take effect on May 1. The government framed the move as focused on national interest and on shifting the country's energy strategy. Suhail Mohamed al-Mazrouei, UAE Energy Minister, said the choice followed a full review of production policy and capacity and was timed to minimise disruption to prices and to other OPEC members.

The departure marks the end of a membership that began with Abu Dhabi’s entry in 1967 and continued when the UAE formed in 1971. For decades the UAE has been one of the largest producers inside OPEC. In February it ranked third within the group, behind Saudi Arabia and Iraq. Energy research firm Rystad Energy said the exit removes a member producing about 4.8 million barrels a day from OPEC's counts.

Production numbers and capacity plans

The UAE’s oil output fell sharply after the closure of the Strait of Hormuz and related attacks. Adnoc, the UAE's state-run oil firm, said production slid from about 3.4 million barrels a day before the Iran war to roughly 1.9 million barrels a day in March, a fall of around 44%.

Adnoc also told officials and public sources that it intends to lift capacity to 5 million barrels a day by 2027. The company framed that increase as part of a national plan to secure supply and to act outside cartel quota constraints.

The UAE's ability to move from current output to the planned 5 million barrels a day remains a central point for markets watching global supply balances.

At the OPEC level, the Iran war and attacks on Gulf shipping removed about 7.88 million barrels a day from OPEC production in March, cutting the group's output to roughly 20.79 million barrels a day that month. Those losses represent the largest fall in OPEC supply in recent decades and have tightened an already fragile global crude market.

Why the UAE left

Officials framed the exit as a strategic, economic move. The UAE said it must focus on its own energy and economic plans rather than cartel-level compromises. Suhail Mohamed al-Mazrouei described the timing as chosen to limit price disruption to markets and to fellow producers.

Mastheads

Analysts and regional commentators link the decision to deeper political disagreements inside the Gulf. Tensions between the UAE and Saudi Arabia over production quotas and regional policy have been long standing. Those tensions widened after Iran’s attacks that targeted Gulf states and shipping lanes, and after the UAE pressed for a tougher line against Tehran.

Dr Ebtesam Al-Ketbi, president of the Emirates Policy Center in Dubai, said the decision was an act of self-interest and a redefinition of the UAE’s role. “In effect, the UAE is redefining its role from a producer within a bloc to a balancing producer that contributes to market stability through its ability to act,” Dr Al-Ketbi said.

Immediate market effects

Removing a major producer from OPEC changes how the cartel calculates quotas and negotiates supply cuts or increases. OPEC has historically relied on a united front to manage prices and to signal policy to markets. The UAE’s exit reduces the club's membership and removes an influential voice inside those negotiations.

Markets already face constrained flows through the Strait of Hormuz, a narrow chokepoint that normally carries about one-fifth of global crude oil and liquefied natural gas. Attacks and threats in the waterway have made shipping riskier and have strained exporters’ ability to get cargoes to market. That logistics pressure helped push OPEC's March production down sharply and is one of the reasons Abu Dhabi cites for wanting direct control of its output.

Traders and energy analysts will be watching two figures closely: the UAE’s actual daily exports as waters and ports are secured, and Adnoc’s progress toward the 5 million barrels a day capacity target. Both numbers will shape how much spare supply the market can count on from the Gulf outside OPEC-managed quotas.

The exit also reveals strains in Gulf politics. The UAE has been more politically aligned with Israel and more hostile to Tehran than some of its neighbours. During weeks of attacks from Iran, Abu Dhabi was one of the worst-hit Gulf capitals. The UAE pressed for stronger collective Gulf action, but formal GCC consensus didn't materialise.

That political split matters for oil diplomacy. Saudi Arabia has traditionally played a leading role inside OPEC, steering production decisions to balance price and political concerns. The UAE's unilateral move weakens that dynamic. It also places the Gulf’s second-tier producers in a different bargaining position when OPEC and OPEC+ ministers meet.

US political rhetoric has fed into the debate. President Donald Trump has long criticised OPEC for high prices and has linked US security guarantees to oil pricing. That critique has added public pressure on Gulf producers about how they manage output and how closely they work with the United States.

For the UAE, leaving OPEC offers a pathway to protect state revenue and to adapt to shocks. The UAE government and Adnoc can now set production and export levels without coordinating a quota within the cartel. That gives Abu Dhabi flexibility to prioritise revenue in a period of disrupted shipping.

For importing countries and oil companies, the exit makes people wonder about who will fill any persistent supply gap. The market has already seen a substantial shortfall in March. How quickly other producers increase exports will affect refinery runs, shipping contracts and forward pricing. Rystad Energy and other research houses will be recalculating supply balances now that the UAE will act outside the cartel's framework.

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Adnoc's plan to lift capacity to 5 million barrels a day by 2027 will be watched when OPEC and OPEC+ ministers meet.

This article was created with AI assistance.