UAE Leaves OPEC to Pursue Independent Energy Strategy as Regional Tensions Escalate

The United Arab Emirates has formally announced its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC), dealing a serious blow to the influential oil producers’ group at a time when the ongoing Iran war has exposed deep divisions among Gulf nations.

The decision, which takes effect on May 1, marks the departure of one of OPEC’s largest producers and is expected to weaken the cartel’s influence over global oil supplies. It also highlights growing tensions between the UAE and Saudi Arabia, the de facto leader of the group.

UAE Energy Minister Suhail Mohamed al-Mazrouei described the move as a strategic policy decision taken after a thorough review of the country’s long-term energy objectives. In his first public comments on the matter, Mazrouei told Reuters that the UAE had not consulted other countries before making the announcement. “This is a policy decision. It has been done after a careful look at current and future policies related to level of production,” he said, adding that rising global energy demand would create opportunities for the UAE to play a larger role in meeting that need.

The timing of the exit is particularly significant. Gulf oil producers have faced severe disruptions in exports through the Strait of Hormuz due to Iranian threats and attacks on vessels. As a result, OPEC+’s share of global oil output has already declined sharply, falling to 44 percent in March from about 48 percent in February, according to the International Energy Agency.

The UAE, one of OPEC’s largest producers, has been constrained by the group’s production quotas, which most recently limited its output to around 3.2–3.4 million barrels per day.

However, the country has invested heavily in expanding its upstream capacity and aims to reach 5 million barrels per day by 2027. By leaving OPEC, the UAE will no longer be bound by these quotas, enabling it to ramp up production more freely in line with its infrastructure and global demand once exports through the Strait of Hormuz resume.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, noted that the move opens the door for the UAE to gain global market share when geopolitical conditions stabilise. Jorge Leon of Rystad Energy described the UAE as one of the few OPEC members, apart from Saudi Arabia, with significant spare production capacity. “Outside the group, the UAE would have both the incentive and the ability to increase production,” he said, raising questions about Saudi Arabia’s ability to continue acting as the market’s central stabiliser.

The announcement comes amid heightened regional diplomacy as Gulf leaders met in Saudi Arabia on Tuesday to coordinate a response to the thousands of Iranian missiles and drones that have targeted their territories since the United States and Israel launched military action against Iran in late February.

Oil prices initially rose on the news before trimming gains as traders assessed the limited immediate impact due to ongoing constraints in the Strait of Hormuz. The UAE’s departure represents a notable policy victory for US President Donald Trump, who has long criticised OPEC for what he described as exploiting global consumers through high oil prices.

In 2018, Trump accused the group of “ripping off the rest of the world.” He has also tied US military support for Gulf nations to expectations of more moderate oil pricing. Once close allies, the UAE and Saudi Arabia have seen their relationship cool in recent years over differences in oil policy, regional geopolitics, and competition for foreign investment and talent.

The UAE has positioned itself as a business and financial hub with strong ties to the United States and Israel, forged through the 2020 Abraham Accords. The exit is likely to benefit consumers and the broader global economy by potentially increasing oil supply when conditions allow.

However, it also underscores the challenges facing OPEC as member countries pursue divergent national interests amid shifting energy markets. The UAE has not indicated plans to leave the broader OPEC+ alliance immediately, though its departure from OPEC itself weakens the core group’s cohesion.