The United Arab Emirates (UAE) announced on Tuesday that its 59 years of membership in the Organization of the Petroleum Exporting Countries (OPEC) will come to an end, effective May 1.
The split was not a surprise, given the growing political and economic rifts between the Emirates and other OPEC members, especially Iran and Saudi Arabia.
The UAE also withdrew from OPEC+, the expanded coalition formed in 2016 to induct ten major non-member oil producers — notably including Russia, which by that point had become the world’s third-largest oil producer.
The official statement from the UAE Ministry of Energy and Infrastructure said the decision to withdraw “reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets.”
The ministry said the decision to separate from OPEC “aligns with the United Arab Emirates’ long-term strategic and economic vision and the evolution of its energy sector, including accelerating investment in domestic energy production, while reinforcing its commitment to its role as a responsible and reliable producer looking ahead to the future of global energy markets.”
The statement mentioned the current “disruptions in the Arabian Gulf and the Strait of Hormuz” as factors in the UAE’s “thorough review” of its OPEC membership.
“The stability of the global energy system relies on the availability of flexible, reliable, and reasonably priced supplies, and the UAE has invested to meet demand changes efficiently and responsibly, prioritizing supply stability, cost, and sustainability,” the statement said.
The UAE’s statement frequently returned to the topic of “flexibility,” a clear rebuke to the OPEC cartel’s practice of imposing production caps on member states to prop up global oil prices. The statement concluded by essentially promising that the UAE would not wantonly disrupt energy prices with its newfound production flexibility.
“It is noteworthy that this decision does not change the United Arab Emirates’ commitment to the stability of global markets or its cooperation-based approach with producers and consumers,” the statement concluded. “Rather, it enhances its ability to respond to changing market requirements.”
In other words, the UAE wants the option to surge oil production the next time a pack of thugs and pirates tries to shut down a major oil shipping lane or sabotage some pipelines. A source in the energy industry told The National on Tuesday that the Emirates felt the current crisis presented “the right time to leave OPEC.”
“This decision is good for consumers and good for the world. Following the Hormuz crisis, globally, the spare capacity is at a historical low and very tight. This sovereign national decision by the UAE will help lower prices as the UAE will help bring more supply available to the markets,” the source said.
OPEC was established in 1960, with a founding roster that included Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela. The Emirate of Abu Dhabi joined in 1967, four years before the United Arab Emirates brought Abu Dhabi together with six other statelets to declare a union fully independent from the United Kingdom in 1971.
The UAE nearly included Qatar and Bahrain as well, but they opted to remain independent nations, due in part to lingering economic and territorial disputes.
Qatar exited from OPEC in 2019, ostensibly as a “business decision” to support its focus on developing liquid natural gas (LNG) exports, but more likely because several other OPEC members were blockading Qatar at the time. The Saudi-led blockade, which lasted three years, was imposed because the other states thought Qatar had grown too close to Iran, and was working to destabilize the other Gulf states to further Iran’s agenda.
The UAE’s rift with the rest of OPEC became apparent in the summer of 2021, when the Emiratis vetoed a deal to release more oil into the market.
The UAE complained that the “baseline” levels of oil production for the cartel did not properly recognize the huge output of the Emirates, so production caps tended to hurt them much more than the other members.
The UAE said it had agreed to the low pandemic-era baseline in 2020 because it was only supposed to last for two years. Instead of a temporary increase of production to goose the pandemic-ravaged world markets, the UAE wanted a permanent increase to its production baseline — an increase the Emiratis invested heavily to prepare for.
Production quotas remained a sore spot with the UAE for the next five years, and other members grumbled about them as well. Ecuador quit OPEC in 2020, and Angola quit in 2024, due to production quota disputes.
The UAE’s departure leaves the cartel with 11 members — one of which is still Iran, despite its unprovoked military and economic attacks on other members. The UAE is currently OPEC’s fourth-largest producer, so its departure will be keenly felt.
OPEC experienced one of its biggest supply shocks in history during the war with Iran, losing about 7.88 billion barrels per day (bpd) in March. The cartel’s plans to recover from that shock will be difficult to implement if the UAE does not play along, and two other members have become problematic: Iran and Venezuela.
Barron’s speculated on Tuesday that the UAE’s departure could spell the end for OPEC and OPEC+ because the cartels will no longer have the ability to control world oil prices effectively.
An industry strategist suggested the UAE might have split from OPEC to give it more latitude to increase production when the United States asks for it, in the hope of receiving economic and military aid from the U.S. in return.
“The UAE’s exit will diminish the influence of Saudi Arabia, OPEC’s de facto leader, and the broader framework that includes Russia and other non-OPEC producers. Riyadh has traditionally served as OPEC’s swing producer, using its spare capacity and diplomatic influence to hold the group together, but that depends on members accepting Saudi leadership,” Barron’s noted.
This disruption of Saudi influence would be a feature, not a bug, to the UAE. The leftist American newspaper the New York Times (NYT) pointed to the “festering tensions between the Emirates and Saudi Arabia,” including tensions from the UAE pursuing a closer relationship with Israel and backing a separatist group in Yemen.
The UAE is also said to be displeased with the passive Gulf Cooperation Council (GCC) and Arab League responses to Iran’s attacks, complaining openly about the failure of the rickety “containment” policies those organizations have pursued for Iran.
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