UAE announces its withdrawal from OPEC

The United Arab Emirates has announced its withdrawal from OPEC and the broader OPEC+ alliance, effective May 1, 2026, stripping the cartel of one of its highest-capacity and lowest-cost producers.

According to Emirates News Agency (WAM), the decision stems from the UAE's long-term strategic and economic vision, including accelerating investment in domestic energy production. The country joined OPEC in 1967 through the Emirate of Abu Dhabi and continued its membership following the federation's establishment in 1971. Still, UAE Energy Minister Suhail Al Mazroui affirmed in a press statement that the decision was taken unilaterally, with no input from Saudi Arabia or other countries.

The UAE has increasingly chafed under OPEC+ production constraints in recent years, having secured a higher baseline quota in 2021 following a protracted dispute with Saudi Arabia. Abu Dhabi National Oil Company (ADNOC) has since pushed aggressively toward a production capacity target of 5mn barrels per day by 2027, a trajectory difficult to reconcile with the coordinated output cuts that have defined OPEC+ policy since 2022.

The Emirates News Agency (WAM) cited ongoing near-term geopolitical volatility in the Arabian Gulf and disruptions in the Strait of Hormuz as additional factors informing the timing, framing the withdrawal as a response to market need rather than a departure from cooperative principles. The UAE will continue gradually increasing production in line with demand and market conditions following its exit.

The departure raises immediate questions about cohesion within OPEC+, where Saudi Arabia has shouldered a disproportionate share of voluntary cuts. With the UAE now free to produce at will, pressure on other members to reassess their own quota commitments is likely to intensify ahead of the group's next ministerial meeting.

"The UAE withdrawal marks a significant shift for OPEC. Alongside Saudi Arabia, it is one of the few members with meaningful spare capacity, the mechanism through which the group exerts market influence," Rystad Energy analyst Jorge Leon told Reuters.

“While ‌near-term effects may be muted given ongoing disruptions in the Strait of Hormuz, the longer-term implication is a structurally weaker OPEC. Outside the group, the UAE would have both the incentive and the ability to increase production, raising broader questions about the sustainability of Saudi Arabia’s role as the market’s central stabiliser, and pointing to a potentially more volatile oil market as OPEC’s capacity to smooth supply imbalances diminishes," Leon concluded.