OPEC suffers losses: The UAE has announced its withdrawal from the cartel

The United Arab Emirates announced its withdrawal from OPEC and OPEC+ on May 1. The cartel thus loses almost 15% of its capacity, and the broader group, including Russia, loses about 10%. Despite the sensationalism of this news, it belongs to the category of "expected sensations", as relations between the Emirates and OPEC have been far from harmonious in recent years. The Iranian crisis was not so much a reason as a convenient reason to leave the organization. Izvestia found out why the UAE is saying goodbye to OPEC, what will happen next with the cartel and the regulation of the global oil market in general.

Sudden exit

The war in Iran has wreaked havoc on the global oil market. Problems have arisen for both consumers and manufacturers. The latter, faced with the biggest geopolitical crisis since 1973, found themselves with too strong internal contradictions, which have now come out.

The demonstrative nature of the UAE's withdrawal is highlighted by the lack of coordination within the bloc. Such decisions usually take months to prepare behind the closed doors of ministerial meetings in Vienna. This time, Abu Dhabi confronted Riyadh with the fact. For Crown Prince Mohammed bin Salman, this is not just an economic loss, but a personal political fiasco: the Emirates were the second most important pillar of the Arab core of OPEC.

However, if we look at the retrospective of relations within the alliance, the current rupture looks like a logical outcome of a protracted conflict. Tensions between Abu Dhabi and the Saudi leadership have been rising since 2021. The Emirates has consistently invested huge amounts of money — more than $150 billion — in expanding the capacity of its national company, ADNOC. By the beginning of 2026, the UAE's production potential had reached 4.8 million barrels per day, but OPEC+ quotas forced the country to keep almost a million barrels of production in conservation. At the same time, in 2024-2025, the Emirates were regular quota violators, producing many tens and often hundreds of thousands of barrels per day more than they were allowed.

Abu Dhabi has repeatedly expressed dissatisfaction with the fact that it is being forced to sacrifice revenue in order to maintain prices, while other parties to the agreement violate discipline. Now, having renounced its obligations, the UAE gets full freedom of action to monetize its reserves. At the same time, the Emirates, represented by its Ministry of Energy, stressed that they did this during the period of military confrontation precisely in order to harm the market and their partners as little as possible. Right now, most of the oil in the Gulf is not being shipped anywhere anyway, so no one will feel this effect at the moment. The result will be noticeable only many months after the end of the war and the opening of the Strait of Hormuz (industry experts note that even six months after the cessation of hostilities and the restoration of navigation in full, only about 80% of the capacity will be operational again, the rest will take even more time).

Who's next

Given the current geopolitical situation, the UAE is in a privileged position. Unlike its neighbors, the Emirates is able to circumvent the blockade of the Strait of Hormuz by redirecting more than half of its exports overland to terminals on the coast of the Gulf of Oman.

In the future, the effect may be much more powerful. Even adding 100-200 thousand barrels to a market in equilibrium can put extreme pressure on prices. And the UAE, being the cartel's third largest exporter, can provide much more. But not only the pure numbers are important, but also the damage that the decision of the Emirates may cause to the authority of OPEC as a cartel that controls global oil production, at least a crucial part of it.

In addition, it can provoke a chain reaction among those members of the organization, including those from the Gulf countries, who had previously felt violated. Iraq, the second largest producer in OPEC, has been complaining about the quota system for years. The country, recovering from decades of conflict, desperately needs foreign exchange earnings, and the cartel's strict restrictions have hampered the development of giant southern deposits. If Iraq sees that the UAE is successfully monetizing its oil outside the union, the temptation to follow suit may become irresistible.

Kuwait is also in the process of a massive modernization of its oil and gas sector. The need to recoup multibillion-dollar investments in mining and processing does not go well with a policy of curbing production.

Strategic transformation

Ebtesam Al-Ketbi, head of the UAE Policy Center and Professor of Political Science, believes that the decision should be viewed not as a technical exit from the OPEC and OPEC+ mechanisms, but as a reflection of a broader strategic transformation of the country's role in the global energy market.

According to her assessment, we are talking about a transition from collective quota obligations to a more sovereign and flexible mining management model.

"This approach allows the UAE to respond more quickly to external challenges and disruptions, including those related to the situation around the Strait of Hormuz," Al-Ketbi told Izvestia.

At the same time, according to the expert, such a shift may weaken OPEC's internal cohesion over time, but at the same time strengthens the UAE's position as an independent player capable of directly influencing global oil supply parameters.

Egyptian Professor of Economics and Energy Wafa Ali believes that in the long term, such steps can lead to deeper changes in the market. According to her, this will accelerate the transition from strict "cartel discipline" to a more competitive model in which key low-cost producers, including Saudi Arabia and the UAE, will actively compete for a share in the global oil market.

"A line has been drawn"

Nevertheless, the withdrawal of a key member may lead to the complete collapse of OPEC+, and some experts believe that this result has been brewing for a long time.

According to Valery Adrianov, associate professor at the Financial University under the Government of the Russian Federation, this is a landmark event that draws a line under the organization's activities.

— At the beginning of its existence, it played a certain positive role, when OPEC+, thanks to quotas, was able to keep prices at a more or less acceptable level. However, in subsequent years, the share of OPEC+ in global production declined against the background of growth among other players, primarily the United States. Therefore, OPEC+ has recently been forced to return to a policy of increasing quotas. But the impact of her actions on quotes was more like a statistical error than any real impact on the market," the expert said.

He added that the members of the organization understood that they needed to "somehow disperse," but it was unclear how to do this. If OPEC+ ceased operations, the market could indeed react with a sharp decline in quotations. In this case, there would be a threat of a trade war of all against all within the framework of dumping and a collapse to $ 30-40 per barrel.

— In this regard, the conflict in the Middle East may have shown individual participants the way out of OPEC+. In this case, the collapse of the organization will naturally not lead to any drop in prices, since the market is affected by much more serious factors related to the cessation of supplies from the Persian Gulf. But so far we do not have a clear understanding whether the UAE's withdrawal will lead to the complete disintegration of OPEC+, or whether it will remain at least in some format," the source said.

At the same time, it is difficult to calculate the effect for Russia. Prices are extremely volatile now, and national exports are susceptible to Ukrainian attacks on port infrastructure. In addition, sanctions are still in effect. At the same time, in the longer term, a weaker OPEC+ may allow the country to increase exports with minimal restrictions, not to mention logistical advantages such as the Northern Sea Route, which allows it to supply raw materials to any market.