At a moment when U.S.-Iran negotiations have reached a deadlock, the United Arab Emirates (UAE) 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 that has exposed deep fractures within the Gulf's most powerful energy bloc at a moment when Middle East tensions are already running high over the ongoing Iran conflict.
OPEC's core function,Reuters has noted, is to stand ready to balance oil markets — particularly by cutting output when demand weakens. The UAE is OPEC's third-largest producer. Its departure directly undermines the group's collective control over global supply. UAE Energy Minister Suhail Mohamed al-Mazrouei has described the decision as a "strategic move" based on a careful assessment of current and future production policy, stressing that no other country — including de facto OPEC leader Saudi Arabia — was consulted beforehand. With the world requiring more energy, al-Mazrouei has argued that leaving OPEC's quota constraints will allow the UAE to respond more flexibly to global demand.
According to International Energy Agency (IEA) data cited by Reuters, the UAE's daily crude output stood at approximately 3.4 million barrels before the United States and Israel launched military operations against Iran in February — roughly 3% of global supply. Yet the UAE's actual production capacity reaches 4.85 million barrels per day, with plans to expand that to 5 million barrels per day by 2027. Withdrawal from OPEC effectively removes the quota ceiling that has prevented Abu Dhabi from producing at full capacity. Oil prices pared only modest gains following the announcement, which al-Mazrouei attributed to the ongoing closure of the Strait of Hormuz, limiting near-term market volatility.
Reuters energy columnist Ron Bousso has analyzed that the broader context is one of acute regional disruption. The Strait of Hormuz — through which roughly one-fifth of the world's crude oil and liquefied natural gas passes — has been effectively closed for approximately two months. The blockade has trapped more than 13 million barrels per day of output, around 13% of global supply, and has forced producers to shut in nearly 10 million barrels per day of capacity. Under these extreme conditions, OPEC's traditional mechanism of supply adjustment to stabilize prices has ceased to function. Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB), has framed the UAE's decision as a positive development for consumers: "This opens the door for the UAE to capture global market share once geopolitical conditions normalize," Malik said.
A Fracture Between Riyadh and Abu Dhabi
The UAE's exit places Saudi Arabia in the most uncomfortable position, Reuters has reported. Abu Dhabi and Riyadh — once the closest of allies — have accumulated a significant record of friction in recent years, spanning oil policy, regional geopolitics, and competition for foreign talent and capital. The two countries have taken divergent positions in conflicts across Sudan, Somalia, Yemen, and Libya, and have competed directly for status as the Middle East's dominant commercial hub and seat of political influence.
The withdrawal reflects a fundamental divergence in strategic vision. Analysts note that the UAE seeks to monetize its hydrocarbon reserves before the energy transition reaches a tipping point, while Riyadh has favored a more disciplined approach to managing output and price levels.
The security dimension has also proven critical. Bousso has noted that Iran's missile and drone strikes against UAE and Saudi territory — both OPEC members — accelerated Abu Dhabi's decision to exit, exposing just how fragile shared institutional interests prove to be when national security and fiscal revenues come under simultaneous threat. UAE Presidential Diplomatic Adviser Anwar Gargash publicly criticized the Arab and Gulf states' collective response to Iran's recent attacks at the Gulf Influencers Forum on April 27.
Helima Croft, analyst at RBC Capital Markets, has observed: "Abu Dhabi has long sought to monetize its capacity expansion investments," Croft said. The UAE committed approximately $150 billion to expand its production capacity and has sought a higher OPEC quota — currently set at 3.5 million barrels per day — a dispute that became one of the principal fault lines in the Saudi-UAE relationship.
Reuters has also noted the broader Washington dimension. Former U.S. President Donald Trump accused OPEC in 2018 at the UN General Assembly of "ripping off the world" through inflated prices, and has repeatedly linked American military support for Gulf states to oil pricing — criticizing them for "using" U.S. protection while imposing high prices.
The UAE, as the region's leading commercial and financial center, is among Washington's most strategically important partners in the Middle East. That relationship deepened further after the UAE came under Iranian attack, reinforcing Abu Dhabi's alignment with both the United States and Israel. The UAE normalized relations with Israel under the Abraham Accords in 2020, a framework Abu Dhabi has used to expand its regional influence and strengthen its channel to Washington.
Five anonymous OPEC+ sources told Reuters they were blindsided by the UAE's decision and believe it will complicate the group's ability to balance markets through supply management. Gary Ross, CEO of Black Gold Investors, has argued that OPEC+ will not collapse entirely: "At the end of the day, Saudi Arabia essentially is OPEC — it is the only country with meaningful spare capacity," Ross said. Saudi Arabia holds capacity of approximately 12.5 million barrels per day but has kept production below 10 million barrels per day in recent years. Two Iraqi oil officials also confirmed toReuters that Iraq — OPEC's third-largest producer — has no current plans to exit, as Baghdad requires stable and acceptable price levels to fund its budget.
A Structural Weakening — and the Risk of a Price War
OPEC was founded in 1960 and once controlled more than 50% of global production. The rise of U.S. shale oil has eroded that dominance steadily; OPEC's market share had already fallen to approximately 30% last year. The IEA has noted that even the expanded OPEC+ grouping — which includes Russia — controlled roughly half of global output last year. Following the UAE's departure, that figure is expected to fall to approximately 45%. Separate monthly IEA data shows OPEC+'s share of global production declining from 48% in February 2026 to 44% in March, with further declines projected for April and May.
Jorge Leon, a former OPEC official now serving as an analyst at Rystad Energy, has stated: "The UAE's exit marks a significant turning point for OPEC... In the long run, this means OPEC will be structurally weaker," Leon said. Bousso has gone further, warning that once the Iran conflict ends and trapped crude re-enters markets, a severe price war between the UAE, Saudi Arabia, the United States, and other major producers becomes a real risk — one that would, in effect, mark the end of OPEC as the world has known it. Such a scenario would also raise fundamental questions about Saudi Arabia's continued viability as the market's central stabilizing force.
Bloomberg has analyzed that OPEC's influence has been eroding for years as new capacity — particularly U.S. shale — has flooded markets. Saudi Arabia, which has positioned itself as the guardian of global market stability, has struggled to contain overproduction by member states, and a series of smaller members have exited the organization over the past decade.
The UAE's withdrawal will further diminish OPEC's capacity to manage oil prices through supply coordination, and positions Abu Dhabi as an increasingly independent force in global energy markets. Bloomberg also noted that the UAE's decision has laid the groundwork for the next round of market share competition and a potential future price war.
Greg Brew, analyst at Eurasia Group, has concluded: "OPEC's market influence will diminish. The UAE's exit will undermine the organization's credibility, given the UAE's significant share of total OPEC production capacity," Brew said.
