Shock and opportunity: The consequences of the UAE’s OPEC exit

The United Arab Emirates has announced its withdrawal from OPEC and the OPEC+ format effective May 1, 2026, ending nearly six decades of membership. This marks the largest institutional disruption to the oil production coordination system since the establishment of the expanded OPEC+ format in 2016 and is perceived by the market as a step towards weakening the group’s ability to influence global oil prices.

At the same time, the move reflects Abu Dhabi’s strategic course towards maximizing its own production and increasing its market share, while maintaining its image as a ‘responsible supplier’ and relying on the long‑term growth of global energy demand.

The UAE’s withdrawal objectively leads to the potential growth of global oil production, and as a consequence, to downward pressure on prices in the medium term – especially after the unblocking of the Strait of Hormuz. It is already being described as one of the most notable institutional shifts in the energy market over the past decade. The Emirati authorities present this step as a “strategic re‑evaluation project” aligned with national economic interests, rather than a one‑off conflict over quotas.

From an economic perspective, the issue is not just about how many barrels Abu Dhabi and Dubai will produce but about the very architecture of global oil coordination. OPEC and OPEC+ are ceasing to be a monolith even in the formal sense: One of the largest and most flexible producers is moving into ‘independent mode’, transforming the market from a quota‑cartel structure into a more fragmented and sensitive one – a market driven not only by economics but also by geopolitics.

Why the UAE wanted out

In recent years, tensions have been building up between the UAE and Saudi Arabia over the issue of quota allocation within OPEC+. The UAE invested in expanding production capacity but was restricted in its ability to monetize it due to collective commitments to cut output. In fact, even before the official announcement in 2026, the UAE repeatedly signaled dissatisfaction with the level of its quotas and a desire for greater autonomy in making production decisions.

Official statements from the UAE government and Energy Minister Suhail Al Mazrouei stress that the decision to withdraw from OPEC constitutes a sovereign political decision in the field of energy policy, adopted following a “prolonged and thorough review” of the national strategy. The official wording highlights several key motives:

• Alignment with the UAE’s long‑term strategic and economic vision and the evolution of the country’s energy sector.
• Primary emphasis on national interests and strategic priorities, ensuring the continued perception of the country as a responsible and reliable supplier.
• The anticipated sustainable growth of global energy demand in the medium- and long-term perspective justifies the expansion of the UAE’s own production and investments in the capacity foundation.

The key economic factor behind the decision is the significant expansion of the UAE’s production capacity and the drive to fully monetize it outside the constraints of a rigid quota system.

It should be noted that the UAE’s current production stands at around 3.4-3.5 million barrels per day (bpd), with plans to increase capacity to 5 million bpd by 2027 through investments in upstream projects.