The United Arab Emirates has announced its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC) and the broader OPEC+ alliance, with the decision taking effect on May 1, 2026. The announcement, made via state news agency WAM, ends nearly six decades of UAE membership in the world’s most powerful oil producers’ cartel.
The Energy Ministry said the exit follows “a comprehensive review of the UAE’s production policy and its current and future capacity” and is driven by national interest. UAE Minister of Energy and Infrastructure Suhail Al Mazrouei described it as a “policy-driven evolution aligned with long-term market fundamentals.”
The UAE joined OPEC in 1967 through Abu Dhabi, four years before the federation was formally established. It has since been one of the group’s most influential members, accounting for roughly 4 percent of global oil production and serving as the third-largest producer within OPEC, behind Saudi Arabia and Iraq.
Iran War Reshapes Gulf Energy Dynamics
The announcement comes in the context of the ongoing Iran-UAE conflict, which has caused severe disruptions to energy supply across the region. Iranian missile and drone attacks on UAE infrastructure, combined with Tehran’s blockade of the Strait of Hormuz, have dramatically constrained the country’s ability to export oil.
The war wiped out 7.88 million barrels per day of OPEC production in March alone, pushing the group’s total output down 27 percent to 20.79 million barrels per day. That represents the largest supply collapse in the cartel’s history, surpassing even the cuts during the Covid-19 pandemic and the 1970s oil crisis.
The UAE produced 3.4 million barrels per day before the conflict began. The Energy Ministry confirmed it would “gradually increase production to supply global markets, once freedom of navigation is restored in the Strait of Hormuz.”
UAE Eyes 5 Million Barrels Per Day by 2027
Outside the constraints of OPEC quota agreements, the UAE now has the flexibility to pursue its own production targets. The government has set an ambitious goal of reaching 5 million barrels per day in capacity by 2027, up from its current 4.8 million barrel capacity. That ambition had long been at odds with the production limits imposed under OPEC+ arrangements, under which the UAE was producing close to 30 percent below its actual capacity.
Al Mazrouei told CNBC the timing was deliberately chosen to minimize disruption. “Our exit at this time is the right time for it, because it will have a minimum impact on the price and it will have a minimum impact on our friends at OPEC and OPEC+,” he said. He also clarified the move was not directed at Saudi Arabia. “This has nothing to do with any of our brothers or friends within the group.”
Analysts have noted the longer-term significance. Rystad Energy described the UAE exit as pointing toward a “structurally weaker OPEC,” with the cartel’s ability to calibrate supply and defend prices increasingly in question. The UAE’s departure follows Qatar’s exit from OPEC in 2019. Combined, the two moves signal a gradual Gulf realignment away from the cartel model.
The Energy Ministry said the UAE would continue to act as a responsible producer, bringing additional supply to market in a “gradual and measured manner, aligned with demand and market conditions.” It also reaffirmed its long-term investment across oil, gas, renewables, and low-carbon solutions.
What It Means for Global Oil Markets
U.S. crude oil surpassed $100 per barrel following the announcement, as markets processed both the OPEC development and stalled Iran peace talks. Analysts at Citi projected Brent could climb as high as $150 and average $130 per barrel through the third quarter, before dropping back to around $100 by year-end. Goldman Sachs raised its fourth-quarter forecast for U.S. crude to $83 per barrel and Brent to $90.
The near-term price impact of the UAE’s exit is limited while the Strait of Hormuz remains blocked. But strategists say the structural shift is significant. With global oil demand approaching a long-term peak, the incentive for low-cost producers to remain inside a quota system is weakening. The UAE, which holds some of the world’s most cost-competitive and lower-carbon barrels, has clearly decided its future is better served outside the cartel.
OPEC lost approximately $77 billion in annual oil sales contribution with the UAE’s exit, based on the group’s $455 billion total revenue last year. Whether other members follow suit remains the bigger question hanging over the oil market.
