On April 28, the United Arab Emirates (UAE) announced its decision to withdraw from the Organization of the Petroleum Exporting Countries (OPEC) effective May 1, ending a nearly 60-year journey as a member of the organization.
The UAE's withdrawal is viewed as a major shock, with potential substantial damage to OPEC and its unofficial leader, Saudi Arabia.
Analysts say the move reflects long-standing disagreements between the UAE and OPEC over production quotas and also reveals simmering tensions between the UAE and Saudi Arabia, as well as discontent following attacks from Iran. In a world facing what could be the largest energy crisis in decades, the UAE's decision could have far-reaching impacts on the global oil market.
Reasons behind the UAE's decision
The UAE, the third-largest oil producer within OPEC, has voiced dissatisfaction with the organization's production quotas for years. Before the war between the US-Israel coalition and Iran erupted, the UAE produced around 3.4 million barrels of oil per day. OPEC quotas have prevented the UAE from producing and exporting more oil,
fueling internal frustration.
Firas Maksad, Middle East Director at Eurasia Group, told the Financial Times: “The UAE is not happy about having to restrict extraction, because they want to pump more oil while Saudi Arabia wants to pump less.”
Additionally, the UAE's decision to withdraw from OPEC occurred amid rising tensions with Iran, which has faced missile and drone attacks from Iran — another OPEC member. Gulf states were shocked and dismayed by Iran's missile and drone attacks, but the UAE was targeted more heavily. Among Gulf states, the UAE has pursued the toughest stance toward Iran, and the UAE believes the conflict has revealed which partners can be trusted and which cannot.
“Some differences in viewpoints are growing because of disagreements over the US-Iran war and how to respond to the threat from Iran. The UAE aligns with the US and Israel, while other OPEC members seek to diversify relationships and hedge risks,” Maksad said.
Together with withdrawing from OPEC, the UAE also announced withdrawal from OPEC+, the alliance between OPEC and several oil-producing countries outside the bloc, including Russia. Observers say this signals UAE dissatisfaction with Russia’s support for Iran in the conflict.
In an interview with the Financial Times, UAE Energy Minister Suhail al-Mazrouei emphasized that this is a “sovereign decision based on long-term strategic and economic vision and the changing energy market conditions.” He added: “We have actively participated in OPEC and supported all group decisions, but this is a time when we need to look to the future. We see this moment as appropriate because our departure now will have the least impact on other oil producers.”
Previously, the UAE had threatened to withdraw from OPEC and had clashes with Saudi Arabia over production quotas for years. Analysts say the current US-Iran conflict has accelerated long-standing dynamics. The UAE has long argued that it should export oil at maximum levels to increase revenue, invest in development, and prepare for a new order as the world moves away from fossil energy.
However, OPEC — led unofficially by Saudi Arabia — has imposed production quotas to raise prices and curb UAE output. Riyadh needs higher oil prices — near $100 per barrel — to balance the budget, whereas the UAE is wealthier and does not require oil prices that high.
Impact on OPEC and Saudi Arabia
Relations between Abu Dhabi and Riyadh have deteriorated as tensions between the Gulf powers escalated in December last year and January over support for opposing factions in Yemen. The rift appeared to ease when Gulf states united in anger over Iran’s regional attacks, but tensions resurfaced as the conflict intensified UAE discontent with some multilateral and regional organizations.
The UAE has borne the brunt of Iran's retaliatory attacks, with more than 2,000 missiles and drones fired at the UAE. Abu Dhabi has publicly criticized what it views as the weak responses of Arab and Muslim states.
Following the UAE's withdrawal from OPEC and OPEC+, observers have speculated that the UAE could consider freezing its membership in the Arab League and the Gulf Cooperation Council (GCC).
The UAE announced its decision while GCC leaders — including the UAE, Saudi Arabia, Qatar, Kuwait, Oman and Bahrain — were meeting in Jeddah to discuss the Iran conflict.
According to observers, the impact of the UAE's withdrawal from OPEC will not be clear until the Hormuz Strait is fully open and the region can transport oil and gas normally. Currently, the UAE exports only about half of its usual oil volume because the strait remains closed.
Jorge Leon, head of geopolitical analysis at energy consultancy Rystad Energy and a former OPEC employee, argues that the bloc will be “weaker structurally” without the UAE, since Saudi Arabia is the only remaining member with spare capacity.
Oil markets could become more volatile as OPEC's ability to rebalance supply and demand diminishes. The UAE accounts for about 12% of OPEC's total oil production.
Reserve capacity — unused oil production capacity that can be brought online quickly to address major shocks — could be mobilized to address large-scale crises. Saudi Arabia and the UAE control most of the world’s spare oil production capacity, more than 4 million barrels per day, giving these two countries outsized influence during supply disruptions.
The UAE’s withdrawal “removes one of the core pillars supporting OPEC’s market-management capability,” Leon said, suggesting OPEC will be structurally weaker as a result.
This also deals a blow to Saudi Arabia by weakening its ability to manage OPEC as an organization — a view echoed by David Goldwyn, a former U.S. energy diplomat. While Riyadh will still retain considerable ability to influence the market through its own spare capacity, its position will be weaker with the UAE no longer a member, Goldwyn told CNBC.
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