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Could the UAE’s exit from OPEC reshape the global oil market?
The United Arab Emirates has officially withdrawn from the OPEC and OPEC+ frameworks, a move that immediately sparked debate about the future of the organisation and the stability of the global oil market. The decision highlights growing tensions within OPEC and raises important questions about how oil production, exports, and energy alliances may change in the coming years.
For years, internal disagreements have existed among OPEC members. Some countries prioritise keeping oil prices high, while others aim to expand production and gain a larger share of the market. At the same time, geopolitical rivalries in the Gulf region and different long-term energy strategies have made cooperation increasingly difficult. The UAE’s withdrawal appears to be the clearest sign yet that these divisions are becoming harder to manage.
According to the official position of the Emirati leadership, the decision reflects the country’s desire for greater independence and a more flexible energy policy. Officials argued that leaving the organisation would allow the UAE to respond more effectively to rising global energy demand, especially after major investments designed to increase oil production capacity. The country’s energy minister stated that operating outside the group would provide more freedom and strategic flexibility.
Behind the official explanation, however, deeper economic frustrations can also be identified. The UAE had long expressed dissatisfaction with OPEC’s quota system, arguing that it limited the country’s ability to fully utilise its rapidly growing production capacity. In recent years, the credibility of the organisation’s collective discipline had already weakened, as several members – including Nigeria and Iraq – repeatedly exceeded their production limits.
As a result, many observers interpreted the UAE’s departure as a major blow to OPEC, the organisation that has historically played a key role in controlling oil production and influencing global prices. Some analysts even suggested that the event could mark the beginning of a slow decline in OPEC’s global importance.
The reaction from OPEC+ members came quickly. In early May, seven countries within the alliance agreed to increase oil production by 188,000 barrels per day in June, making it the third consecutive monthly increase. Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman all confirmed their “commitment to market stability” in an official statement.
What is OPEC and why does it matter?
OPEC – the Organisation of the Petroleum Exporting Countries – was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. The organisation was created to coordinate oil production policies among major exporters and to ensure stable revenues for member states.
Over the decades, membership changed several times. Today, Algeria, Equatorial Guinea, Gabon, Libya, Nigeria, and the Republic of the Congo are also members. In 2016, during a period of low oil prices, OPEC expanded its cooperation by creating the OPEC+ alliance together with ten additional oil-producing countries, including Russia.
The United Arab Emirates has been one of the organisation’s most important members. In 2025, the country produced around 3.1 million barrels of oil per day, making it OPEC’s fourth-largest producer after Saudi Arabia, Iraq, and Iran. Nevertheless, experts believe the UAE could increase production by another one million barrels per day after leaving the group.
Figure 1. OPEC’s 5 largest oil producers (million barrels per day). Source: BBC, 2026; compiled by the author.
The country is also one of OPEC’s leading exporters. According to recent data, the UAE ranked as the organisation’s third-largest oil exporter in 2025, behind Saudi Arabia and Iraq.
Figure 2. OPEC’s 5 largest oil exporters (million barrels per day). Source: BBC, 2026; compiled by the author.
Despite this, OPEC’s overall influence on global oil markets is no longer as dominant as it once was. In 1973, the organisation accounted for more than half of global crude oil production. By 2025, that figure had fallen to 36.7 per cent, significantly reducing OPEC’s ability to fully control market conditions.
This decline has intensified internal disagreements. Countries such as Saudi Arabia continue to favour production limits that maintain higher oil prices, while others – including the UAE – increasingly focus on expanding exports and market share. These conflicting goals make a unified quota system increasingly difficult to sustain.
Different reactions from global powers
The UAE’s withdrawal was welcomed in the United States, particularly by Donald Trump, who has frequently criticised OPEC for artificially increasing oil prices. The American president openly supported the Emirati decision, arguing that it could lower global energy prices and reduce pressure on consumers.
The European Union reacted far more cautiously. While lower oil prices may provide short-term economic benefits for Europe, officials in Brussels expressed concern about the broader geopolitical consequences. According to diplomatic sources, the EU fears that extremely low oil and gas prices could slow the transition toward renewable and alternative energy sources.
China, meanwhile, could emerge as one of the main beneficiaries of the UAE’s decision. In 2025, China imported nearly 692,000 barrels of oil per day from the Emirates, representing around 6% of its seaborne oil imports. Analysts expect Beijing to increase purchases from the Gulf state if tensions around the Strait of Hormuz ease. Some experts also believe the decision may strengthen financial cooperation between China and the UAE, potentially increasing the role of the Chinese yuan in international energy trade. The different reactions of global powers further increase pressure inside OPEC, as member states become more influenced by their own geopolitical and economic partnerships.
A serious challenge for Saudi Arabia
Saudi Arabia has traditionally acted as OPEC’s de facto leader and the organisation’s main stabilising force. The kingdom has played a central role in coordinating production decisions and maintaining influence over global oil prices.
For this reason, the UAE’s departure represents a significant challenge for Riyadh. The weakening of OPEC unity reduces both the organisation’s credibility and Saudi Arabia’s leadership position within the global energy market. Losing an important regional partner also damages the kingdom’s political influence inside the Gulf region.
At the same time, oil production coordination is likely to become more complicated. An independent Emirati production policy could intensify competition among exporters and increase the possibility that other members may eventually consider leaving the organisation as well. This situation may deepen existing economic and political tensions between Saudi Arabia and the UAE. Since Saudi Arabia has long served as the main balancing force inside OPEC, any reduction in its influence raises serious questions about the future effectiveness of the organisation itself.
Possible consequences for the global oil market
The ongoing US-Iran conflict has already created supply concerns in the Gulf region, increasing uncertainty across global energy markets. Oil prices recently climbed above 125 dollars per barrel, reaching their highest level in four years. Analysts warn that the world could face fuel shortages and accelerating inflation in the near future.
The UAE’s exit from OPEC may further weaken the organisation’s ability to coordinate supply and stabilise prices. As a result, the global oil market could become increasingly fragmented and volatile, while OPEC gradually loses its power to meaningfully influence international energy prices.
An especially important long-term consequence could be the emergence of a new global energy competition. If major oil producers begin acting more independently instead of coordinating through OPEC, competition for market share may intensify dramatically. This could lead not only to sharper price fluctuations but also to new political rivalries and economic alliances involving powers such as China, the United States, and India. In this sense, the UAE’s withdrawal may eventually be remembered not simply as a diplomatic disagreement but as the beginning of a major transformation in the global energy system.
This post is a reprint of an article written by our colleague, which was originally published on May 12, 2026, in the online journal CEEnergy News.
