Explained: Why the UAE is leaving OPEC after nearly 59 years

Abu Dhabi: The United Arab Emirates (UAE) will withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ alliance from Friday, May 1, ending almost 59 years of membership in one of the world’s most influential oil groups.

The decision, announced on Tuesday, April 28, marks one of the most significant shifts in Gulf energy strategy in recent years, with the UAE among OPEC’s largest producers and its output ranging between roughly 3.2 million and 3.6 million barrels per day under quota arrangements, according to news agency Reuters.

Why is the UAE leaving?

UAE Energy Minister Suhail Mohamed al-Mazrouei said the move followed a review of current and future production policies, Reuters reported.

The core issue is production flexibility. The UAE has invested heavily in expanding oil capacity and wants greater freedom to decide output levels based on market demand and national priorities rather than collective quotas.

Speaking to The New York Times, Al Mazrouei said the world needs more energy resources and that the UAE wanted to operate without being constrained by producer groups.

David Oxley, Senior Climate and Commodities Economist at Capital Economics, said the country’s production expansion made a more independent path increasingly likely.

What are OPEC and OPEC+?

OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela to coordinate petroleum policies and support market stability.

OPEC currently has 12 members, before the UAE exit takes effect. Once the withdrawal becomes official in May 2026, the membership will fall to 11.

OPEC+ is a wider alliance that includes OPEC members and external producers such as Russia.

Which countries left earlier?

The UAE is not the first country to leave the group.

Qatar exited in 2019, Ecuador left in 2020, and Angola withdrew in 2024. Countries, including Indonesia, have also suspended or ended membership at different times

Why were quotas a problem for the UAE?

The UAE has argued for years that production targets no longer reflected its growing capacity after heavy investment in its oil sector.

Early signs of strain emerged in 2020, when the UAE and Saudi Arabia differed over how quickly output should recover after pandemic-era cuts.

The divide became clearer in July 2021, when Abu Dhabi objected to proposed OPEC+ production terms before a later compromise.

The UAE sought room to pump more crude, while Saudi Arabia favoured tighter supply to support prices.

Broader policy differences have also emerged in recent years, with the UAE and Saudi Arabia at times pursuing separate approaches on regional economic and strategic issues, adding to pressure within the alliance.

Why now?

The announcement comes at a time of regional instability and uncertainty over exports through the Strait of Hormuz, a crucial route for global crude shipments.

Michael Brown, Senior Research Strategist at Pepperstone, told Reuters that current market conditions mean the bigger issue is transporting crude rather than producing it, suggesting the UAE may be positioning itself for faster production decisions once trade flows return to normal.

What does this mean for OPEC?

The UAE is one of the few members with meaningful spare production capacity, alongside Saudi Arabia. That gives producers the ability to raise supply rapidly during shortages.

Jorge Leon, Head of Geopolitical Analysis at Rystad Energy, told CNBC that the exit removes one of the group’s key market-balancing members.

The move may reduce OPEC’s influence over time, particularly if other producers seek more independent strategies.

Will oil prices be affected?

There was limited immediate reaction in prices, with traders focused mainly on geopolitical risk and shipping disruption.

Over the longer term, extra UAE output outside OPEC restrictions could add supply to the market and weigh on prices, depending on demand conditions.

John Kilduff, Partner / Founder at Again Capital, said producer unity could become harder to maintain during future oversupply periods, according to CNBC report.

What has the UAE said officially?

Emirates News Agency (WAM) said the withdrawal reflects the country’s long-term strategic vision and continued development of its energy sector.

What happens next?

Once the exit takes effect, the UAE will be free to set its own production policy while remaining a major oil exporter.

For global markets, the immediate effect may be modest. But over time, the decision could reshape the balance of power among oil-producing nations.