OPEC, the cartel that limits member output through production quotas, has long constrained the United Arab Emirates’ efforts to expand its oil industry and market share. Frustrated by those limits, the UAE announced it will leave OPEC and the wider OPEC+ alliance, including Russia, effective May 1.
Energy Minister Suhail Al Mazrouei told the New York Times the decision reflects a belief that “the world needs more energy. The world needs more resources, and [the] UAE wanted to be unconstrained by any groups.” Analysts see the move as a calculated step by a producer ready to act independently when conditions allow.
The UAE currently produces about 3.2–3.6 million barrels per day (bpd) under OPEC quotas but holds spare capacity near 4.8 million bpd and plans to push output toward 5 million bpd by next year. Much of that extra output cannot reach markets immediately because regional disruptions in the Strait of Hormuz have diverted exports via the Fujairah pipeline, which is running at full capacity.
Losing the UAE removes one of the few OPEC members with meaningful spare capacity. That weakens OPEC’s toolkit for managing supply and makes it substantially harder for Saudi Arabia—the group’s dominant member—to share the burden of output adjustments. Riyadh has typically defended prices by cutting its own production and enforcing discipline across OPEC. Without the UAE in the fold, Saudi Arabia will have to rely more heavily on its own cuts, a costlier and less effective approach.
David Oxley of Capital Economics called the UAE’s departure “the thin end of the wedge,” suggesting the bonds holding OPEC together are loosening. Saudi Arabia needs oil prices around $90 a barrel to fund government spending and its Vision 2030 transformation, including massive projects like the $500 billion NEOM city. Every barrel Saudi holds back to support prices is foregone revenue, making price defense more painful.
In the near term the exit did not prompt major market moves; Brent crude was largely unchanged on the announcement. Market attention remains dominated by the Strait of Hormuz disruptions, which limit the UAE’s ability to immediately add additional volumes to the world market. Jeff Colgan, an OPEC expert at Brown University, said the decision is a minor near-term factor compared with the Hormuz situation.
Over time, however, if the Hormuz crisis eases and the UAE adds several hundred thousand extra bpd, the exit could contribute to lower and more volatile prices. Rystad Energy’s Jorge Leon noted that losing a member with 4.8 million bpd of capacity and the ambition to produce more takes “a real tool out of the group’s hands.” For low-cost producers nearing peak demand, waiting inside a quota system can look like leaving money on the table.
The move also highlights longer-standing tensions within OPEC, particularly perceptions of Saudi dominance. OPEC’s share of global supply has declined—from more than half historically to less than a third today—reducing its overall influence. The UAE’s exit adds to a pattern of fragmentation: members have repeatedly breached quotas (notably Iraq and Nigeria), Russia’s compliance within OPEC+ has been uneven, and several countries have left OPEC in recent years (Qatar in 2019; Angola, Ecuador, Gabon and Indonesia earlier).
Could the UAE prompt others to follow? Some analysts warn that if other producers with spare capacity see the UAE successfully expand market share outside OPEC, they may be encouraged to reconsider membership. For now, however, few members possess the UAE’s combination of spare capacity and economic diversification, so a mass exodus is unlikely. Saudi Arabia, analysts say, is also likely to try to keep the group together because it remains the key anchor for the organization.
The UAE’s departure therefore weakens OPEC’s ability to manage supply and price through coordinated cuts, raises the cost and difficulty for Saudi Arabia to defend prices, underscores internal divisions, and points to a future where oil markets may be modestly cheaper and more volatile if spare capacity is freed and competition for market share increases. Edited by: Ashutosh Pandey