OPEC loses key member: Will the oil bloc survive?

The United Arab Emirates, one of the world’s biggest oil exporters, has announced it will leave the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ on May 1. The move is seen by analysts as a serious setback for the group and its informal leader, Saudi Arabia. 

The decision comes amid a crisis in the Middle East triggered by the US-Israeli war against Iran, which has disrupted crude flows from the Persian Gulf. Shipments have been choked by the blockade of the Strait of Hormuz – a narrow waterway off the UAE’s coast that normally carries about a fifth of the world’s crude.

Why did it happen? 

Abu Dhabi says the move is driven by “national interests” and is part of a long-term strategy and a “sovereign, strategic choice” aimed at giving it more flexibility over oil output. Emirati officials have repeatedly indicated the country no longer wants to be bound by production quotas, which have limited how much it can actually pump despite heavy investment in expanding capacity. A government source reportedly told AFP that the Gulf nation is seeking greater freedom to raise output once current supply disruptions ease.

The UAE, which joined OPEC in 1967, also expressed appreciation for cooperation within the organization and with OPEC+ partners, a broader group formed in 2016 that includes Russia, Kazakhstan, Oman, Mexico, and other non-OPEC countries.

Who left and who is left in OPEC? 

Over the past decade, several members have walked away from OPEC – including Angola, Ecuador, Indonesia, and Qatar – citing reasons ranging from production quotas and membership costs to broader political tensions.

The group currently has 12 members, while the broader OPEC+ adds 10 more producers, bringing the total to 22 countries, including major non-OPEC players such as Russia, Kazakhstan, Oman, and Mexico.

Some analysts say the UAE’s move could encourage others seeking to raise output to reconsider their participation. Robin Mills, head of Dubai-based consultancy Qamar Energy, told CNN that “now is the time to leave” for members aiming to grow production, pointing to Kazakhstan as a possible candidate.

How much oil does UAE produce? 

Under recent OPEC agreements, the UAE’s output has been capped at roughly 3-3.5 million barrels per day, with actual production hovering around 3.2 million barrels per day. The country has consistently ranked behind fellow OPEC members such as Saudi Arabia and Iraq in terms of production quotas.

Abu Dhabi has long sought higher quotas as it expanded capacity beyond those limits. The country now reportedly aims to raise its production capacity to about 5 million barrels per day by 2027. Analysts say that outside OPEC, it would be able to pump closer to its full capacity, rather than levels set by the group.

What will OPEC do now? 

The UAE’s departure removes a significant share of the group’s production capacity – estimated by the International Energy Agency at around 13% – dealing a blow to OPEC+, analysts say.

Rather than triggering an immediate price war, experts expect a period of higher volatility and “soft adjustment,” as remaining members monitor the UAE’s output and eventually renegotiate production quotas. OPEC+ countries are reportedly expected to discuss Abu Dhabi’s decision at their next scheduled meeting in June.

Economist Jorge Leon of Rystad Energy has argued the UAE’s move could “structurally weaken OPEC” over time, giving the Gulf nation greater incentive to increase output and raising questions over Saudi Arabia’s role as the group’s main stabilizing force. Ole Hansen, head of commodity strategy at Saxo Bank, added that while the market can absorb additional UAE supply in the short term, a shift by producers toward prioritizing market share over quota discipline could undermine OPEC’s ability to manage supply through coordinated action.

How did oil markets react? 

Oil markets were already on edge before the UAE’s announcement, given the US-Israeli war against Iran which is disrupting shipments in the Persian Gulf and raising fears of supply shortages. Brent crude has climbed above $110 a barrel for the first time in weeks, trading around $111 on Tuesday, while US benchmark WTI hovered near $99.

Analysts say the UAE’s exit has added to uncertainty, with traders weighing the prospect of additional supply against ongoing disruptions in the Strait of Hormuz. Most expect the immediate impact to be increased volatility. David Oxley, chief commodities economist at Capital Economics, said the move could initially push prices lower but make markets more volatile “for decades,” particularly if other producers follow.

Good news for US?

Some observers claim the move could be politically convenient for Washington. US President Donald Trump repeatedly accused OPEC of “ripping off the rest of the world” by what he called inflating oil prices and openly linked US military support for Gulf states to energy costs, arguing that while Washington defended OPEC members, they “exploited” this by keeping prices high. A weaker, less coordinated producers’ bloc could give the US more leverage over individual exporters and global benchmarks, analysts argue.

Is OPEC good for global consumers?

Founded more than six decades ago to give oil-exporting countries greater control over prices by coordinating production, OPEC has often been criticized by analysts for what they described as using quotas and output cuts to influence global markets.

Supporters say this coordination has at times helped stabilize prices, including during the 2008 financial crisis and the Covid-19 demand shock, by preventing a deeper market collapse.

Analysts agree that a weaker and more fragmented OPEC could make global oil markets less predictable and harder to manage, with potentially greater price swings and less coordinated control over supply.