One of the world’s largest oil producers has announced its break with the most powerful oil lobby. Here’s why it happened and what it means for the global market.
What Happened?
Starting May 1, the United Arab Emirates are leaving OPEC and OPEC+ — two organizations that have set the rules of the global oil market for decades.
OPEC brings together eleven exporting nations: Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, Nigeria, and others. Together they account for around 35% of global oil production, nearly half of worldwide exports, and roughly 80% of proven reserves. OPEC+ is an expanded format that also includes Russia, Brazil, Kazakhstan, Azerbaijan, and other suppliers. Together they control more than 40% of global output.
The cartel’s leverage is straightforward: members agree on production quotas. Want to push prices up — cut supply. Want to flood the market — open the taps. For years, it worked.
The UAE are no ordinary member of this system. The country supplies at least 12% of the group’s total output, ranking third behind Saudi Arabia and Iraq. The departure of such a player is an event whose consequences are already being felt across markets.
Why Are the UAE Leaving?
The reasons are multiple, and they have been building for years.
Quotas became too tight. Under OPEC rules, the Emirates are permitted to produce 3.4 million barrels per day. Yet the country has capacity for at least 4.85 million and has long wanted to use it. With prices currently above $110 a barrel, every extra million barrels a day translates into billions of dollars in additional revenue. By all accounts, the UAE had already been quietly exceeding their quotas, now they intend to do so openly and strategically.
Tensions with Saudi Arabia. The UAE have long harbored grievances against Riyadh’s dominance within the cartel. Saudi Arabia needs oil at $90 a barrel to fund its ambitious investment programs and therefore pushes for production restraint. The UAE balance their budget at just $50. The two monarchies’ interests have diverged for years, surfacing repeatedly in quota disputes. The Yemeni conflict deepened the rift further: in late 2025, Saudi Arabia struck a faction backed by the UAE themselves.
The war changed everything. It is the broader Middle East conflict that apparently turned a long-debated scenario into reality. The UAE found themselves on the front line: Iran fired more than 2,800 missiles and drones at the country, more than at any other Gulf state, and even more than at Israel. Yet the UAE’s Arab allies within OPEC offered no assistance whatsoever. As one analyst put it, the conflict “likely sharpened the view that existing political relationships had not delivered during the crisis.”
The war also battered the economy: tourist flows dried up, air travel was disrupted, and foreigners, particularly in Dubai, began leaving the country. OPEC, meanwhile, proved powerless to stabilize the market, with the cartel’s leading members themselves falling victim to the Strait of Hormuz blockade. Trust in the organization has been shaken.
The UAE are now betting on a different strategy: ramping up exports by bypassing Hormuz through overland pipelines and possibly entering the war more actively on the side of the United States and Israel.
What Will Happen to Oil Prices?
Don’t expect an immediate crash. It is telling that after the UAE’s announcement, Brent crude barely moved. Investors remain focused on the fate of the Strait of Hormuz: as long as it stays blocked and US-Iran talks are going nowhere, the risk premium baked into prices isn’t going anywhere either.
But even if and when the strait reopens, a sharp price collapse is unlikely. Experts predict demand will remain elevated for at least another year, as countries work to replenish reserves drawn down during the crisis. During that period, the UAE, by expanding their exports, could earn significantly more than they would have made by staying inside the cartel.
What Will Happen to OPEC?
This is where the consequences could prove lasting and painful for the organization. Jorge León of Rystad Energy, a former OPEC demand analyst, puts it plainly: losing a member with 4.8 million barrels per day of capacity and ambitions to grow “deprives the group of a real instrument for managing prices.” Another analyst, Homayoun Falakshahi of Kpler, was even blunter: “This is the hardest blow in the organization’s entire history. The question now is whether OPEC can survive at all.”
Experts predict that the UAE’s example, especially once the Middle East stabilizes, could be followed by other cartel members: those also operating near their production ceiling and unwilling to keep sharing the market with their neighbors.
