OPEC+ core adjusts output as UAE finalises institutional withdrawal

The UAE has formally withdrawn from the Organization of Arab Petroleum Exporting Countries (OAPEC), deepening its strategic pivot away from multilateral energy frameworks.

The announcement on May 3 follows the country’s April 28 exit from OPEC and the broader OPEC+ alliance, underscoring a profound fracture among Gulf producers exacerbated by the ongoing conflict in Iran.

In a formal statement released to the press on May 3, OAPEC confirmed the UAE’s immediate departure. Unlike OPEC, the organisation established in 1968 does not dictate production policy, but the final exit clearly symbolises Abu Dhabi’s absolute intent to independently maximise its vast hydrocarbon assets without institutional restraint.

Crucially, the Abu Dhabi National Oil Co. (ADNOC) said it will award AED200bn ($55bn) in contracts between 2026 and 2028. The CEO said the investment reinforces its five-year capital expenditure programme and will initiate a “new phase of global project execution across its value chain to meet growing global energy demand”, solidifying its commitment to aggressive production growth.

Conversely, a remaining core group of seven OPEC+ members – Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman – convened virtually on May 3 to review current global market conditions. In a bid to maintain coalition discipline, the group agreed to implement a production adjustment of 188,000 barrels per day (bpd), drawn from voluntary cuts initially announced in April 2023.

This targeted adjustment takes full effect in June 2026. However, the participating nations said the April 2023 voluntary cuts may be reinstated partially or fully depending on evolving market dynamics. The coalition reaffirmed the necessity of a cautious approach, explicitly retaining the flexibility to “increase, pause or reverse” the reduction of production adjustments, including those implemented in November 2023.

The participating countries said this measure provides an opportunity to accelerate compliance. They reiterated their commitment to achieving 100% conformity with the Declaration of Cooperation, confirming their intention to completely compensate for any overproduced volumes recorded since January 2024. The Joint Ministerial Monitoring Committee (JMMC) will oversee this process. The group will transition to monthly meetings to assess compliance and market conditions, with the next session scheduled for June 7, 2026.

However, the efficacy of these quota adjustments remains severely compromised by escalating regional hostilities. The war in Iran has deepened diplomatic divisions among major Arab nations and forced the indefinite closure of the Strait of Hormuz, the primary maritime export artery for Gulf producers. Consequently, the region’s major producing countries have effectively lost their strategic capacity to influence global pricing dynamics during an acute supply shock, as millions of physical barrels remain trapped behind the naval blockade regardless of agreed production limits.