The United Arab Emirates (UAE), a member of the Organization of the Petroleum Exporting Countries (OPEC) since 1967 and one of its largest producers, said it will exit the organization effective May 1, citing a need for greater flexibility in managing its production strategy. The move comes at a time of heightened geopolitical tension and severe supply disruption tied to the ongoing Iran conflict and the closure of the Strait of Hormuz.
UAE Energy Minister Suhail Mohamed al-Mazrouei said the decision followed a careful review of the country’s energy strategy.
The departure removes a key source of spare capacity from OPEC’s quota system and raises immediate questions about the group’s ability to coordinate supply policy. The UAE has in recent years invested heavily to expand upstream capacity, targeting production levels well above its current OPEC allocation.
Tensions between the UAE and OPEC leadership—particularly over baseline production quotas—have persisted for several years, reflecting broader divergence in strategy among core Gulf producers.
By exiting, Abu Dhabi gains full autonomy to align output with market conditions and national revenue objectives rather than collective targets set by the group.
Market reaction
Front-month crude futures showed limited immediate reaction following the announcement. At the time of writing, Brent crude had risen above $110/bbl—its highest level in 3 weeks—as stalled US-Iran negotiations showed little progress toward a deal that could restore oil flows through the Strait of Hormuz.
The market remains tightly focused on near-term disruptions stemming from restricted flows through Hormuz, which continues to constrain export volumes across the region. As a result, any incremental barrels from the UAE are unlikely to reach global markets in the immediate term.
While the immediate market impact may be limited, the UAE’s withdrawal adds a layer of uncertainty to the medium- and long-term outlook for global oil supply. The move could weaken cohesion within OPEC+, as the exit of a key producer may complicate future negotiations and erode compliance with output targets. At the same time, greater supply flexibility is likely, with the UAE potentially accelerating capacity utilization—once logistical constraints ease—and bringing additional barrels to market.
Together, these dynamics point to a less coordinated producer landscape, increasing the risk of uneven supply responses to price signals and, in turn, heightened price volatility. The move may also shift greater balancing responsibility toward non-OPEC producers, particularly US shale operators, which have increasingly acted as marginal suppliers in recent years.
About the Author
Conglin Xu
Managing Editor-Economics
Conglin Xu, Managing Editor-Economics, covers worldwide oil and gas market developments and macroeconomic factors, conducts analytical economic and financial research, generates estimates and forecasts, and compiles production and reserves statistics for Oil & Gas Journal. She joined OGJ in 2012 as Senior Economics Editor.
Xu holds a PhD in International Economics from the University of California at Santa Cruz. She was a Short-term Consultant at the World Bank and Summer Intern at the International Monetary Fund.