Fifty-nine years after joining the oil exporters’ group that helped shape the modern Gulf, the United Arab Emirates is walking out the door — and it didn’t bother to tell Saudi Arabia first.

Abu Dhabi announced on Tuesday that it will leave OPEC and the broader OPEC+ framework effective May 1, removing one of the cartel’s two most important producers at a moment when war, blockaded shipping lanes, and stalled diplomacy have already pushed oil above $110 a barrel. Energy Minister Suhail Al Mazrouei told Reuters the decision was taken without consulting any other country, including Riyadh.

“This is a policy decision, it has been done after a careful look at current and future policies related to level of production,” Mazrouei said.

A departure years in the making

The UAE has chafed under OPEC production quotas for years, pushing repeatedly for higher allowances as it invested billions in expanding its capacity to 4.85 million barrels per day — far above the roughly 3.4 million bpd it was producing before the Iran war began in late February. The country’s actual output has since plummeted 44 percent to 1.9 million bpd in March, according to the UAE energy ministry, after Iran blockaded the Strait of Hormuz and attacked energy facilities across the Gulf.

But the immediate catalyst for the exit appears to be a profound sense of abandonment. Anwar Gargash, the diplomatic adviser to the UAE president, publicly criticized fellow Arab and Gulf states on Monday for failing to defend the Emirates against Iranian attacks during the war.

“The Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I think their position has been the weakest historically,” Gargash said at the Gulf Influencers Forum. “I expect this weak stance from the Arab League and I am not surprised by it, but I haven’t expected it from the (Gulf) Cooperation Council and I am surprised by it.”

An energy industry source familiar with the decision framed the exit as both a strategic recalibration and a service to a strained global market. “This decision is good for consumers and good for the world. Following the Hormuz crisis, globally, the spare capacity is at a historical low and very tight,” the source said. “This sovereign national decision by the UAE will help lower prices as the UAE will help bring more supply available to the markets.”

OPEC loses its insurance policy

The cartel’s power has always rested on a simple mechanism: a few members with spare capacity who can open or close the tap to stabilize prices. Jorge Leon, an analyst at Rystad Energy, said the UAE is one of a few OPEC members — alongside Saudi Arabia — that maintain meaningful spare capacity.

“While near-term effects may be muted given ongoing disruptions in the Strait of Hormuz, the longer-term implication is a structurally weaker OPEC,” Leon said. “Outside the group, the UAE would have both the incentive and the ability to increase production, raising broader questions about the sustainability of Saudi Arabia’s role as the market’s central stabiliser — and pointing to a potentially more volatile oil market as OPEC’s capacity to smooth supply imbalances diminishes.”

Saul Kavonic, head of energy research at MST Financial, went further, calling the exit “the beginning of the end of OPEC.”

“With the UAE leaving, OPEC loses about 15% of its capacity and one of its most compliant members,” Kavonic said. “Saudi Arabia will struggle to keep the rest of OPEC together, and effectively have to do most of the heavy lifting regarding internal compliance and market management on its own.”

Why now

Sergey Vakulenko of the Carnegie Russia Eurasia Center noted that the UAE has been planning to grow oil production by up to 30 percent — a target difficult to pursue within OPEC’s quota system.

“Now is probably the least damaging time to announce it — oil prices are high, and there are genuine shortages because of Hormuz closure,” Vakulenko said. “After Hormuz reopens, there will be elevated demand as countries will be replenishing reserves that were drawn down since February, so prices will stay high.”

The timing is also politically convenient. US President Donald Trump has repeatedly attacked OPEC for “ripping off the rest of the world” and has linked American military support for Gulf states to lower oil prices. A unilateral Emirati decision to pump more crude serves both Abu Dhabi’s economic interests and Washington’s political expectations.

The departure follows Qatar’s exit from OPEC in 2019, which Doha framed as a gas-versus-oil mismatch but was widely read as a political statement. With two Gulf producers now outside the tent, the notion of a unified Arab bloc managing global supply looks increasingly fragile.

The market calculus

Brent crude rose 3.1 percent to $111.60 a barrel on Tuesday as stalled Iran–US peace talks kept the Strait of Hormuz effectively closed to most traffic. Only a handful of vessels have transited the waterway in recent days, compared to 125–140 ships daily before the war, according to MarineTraffic. The UAE announcement briefly trimmed those gains, with traders calculating that a free-agent Abu Dhabi could eventually add significant supply.

But the near-term reality is sobering. The Iran war eliminated 7.88 million bpd of OPEC production in March — the largest supply collapse for the group in recent decades, exceeding even the 6.28 million bpd cut recorded during the Covid-19 pandemic. OPEC production fell 27 percent to 20.79 million bpd. The UAE may want to pump more, but much of its export infrastructure remains constrained by the Hormuz blockade.

Ajay Parmar, director of energy and refining at ICIS, said the decision “signifies the general drift in the historically strong alliance between the UAE and Saudi Arabia.” That drift has been visible for years — in the UAE’s normalization with Israel, its commercial ties to Russia, and its willingness to pursue independent foreign policy from Riyadh. The OPEC exit formalizes what was already obvious: Abu Dhabi answers to Abu Dhabi.

A cartel diminished

OPEC now has 11 members. Its founding members include Iran and Venezuela — one embroiled in a devastating war, the other producing a fraction of its historical output. Iraq and Libya have been unreliable producers for years. Nigeria and Angola have their own quota disputes. The burden of cartel discipline now falls almost entirely on Saudi Arabia, which produces roughly 9 million bpd and faces the uncomfortable reality that its most capable partner just became a competitor.

The UAE’s statement thanked OPEC for “decades of constructive cooperation” and pledged continued commitment to “reliable, responsible, and lower-carbon supply.” These are the words of a country repositioning itself as an independent energy superpower rather than a team player. Whether OPEC can function without its most ambitious member is a question the cartel may spend years answering — if it survives that long.

Sources