UAE to exit OPEC after nearly 60 years in major oil market shake-up

• OPEC will lose the United Arab Emirates after almost six decades of membership.

• The UAE wants more freedom to increase oil production beyond OPEC quotas after major investments in capacity.

• Analysts warn the exit could weaken OPEC, with one calling it “the beginning of the end of Opec.”

• The move may lead to lower oil prices long term but increased market volatility, especially if other countries follow.

In a move shaking global energy politics, the United Arab Emirates has announced it will leave OPEC and the wider OPEC+ alliance next month, ending almost six decades of membership.

The decision, which takes effect May 1, is being framed by officials as a strategic shift rather than a sudden break. According to the UAE, it wants more control over its oil production and long-term energy plans, especially as global demand continues to rise.

In a statement, the country said: “The time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets.” 

At the centre of this decision is flexibility. For years, OPEC has operated on production quotas, basically limits on how much oil each member can pump. But the UAE has been investing heavily in boosting its production capacity and wants the freedom to produce more without restrictions.

Analysts say this tension has been building for a while. Dr Carole Nakhle noted that the move “has been a long time in the making,” adding that Abu Dhabi had ambitious plans but often felt held back by group quotas and uneven compliance from other members.

There are also geopolitical factors. The ongoing Middle East conflict, especially disruptions around the Strait of Hormuz, has put pressure on oil supply and exposed cracks within the alliance.

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The exit is not just symbolic; it carries weight. The UAE is one of OPEC’s largest producers, and its departure weakens the group’s ability to control global oil supply and prices.

Energy analyst Saul Kavonic described the move as “the beginning of the end of Opec.”

He added: “With the UAE leaving, Opec loses about 15% of its capacity and one of its most compliant members.”

That’s a serious hit for a group that has long relied on unity to influence global markets.

In the short term, there may not be an immediate impact on supply, largely because the Strait of Hormuz, a key oil route, is still facing disruptions due to conflict.

But over time, things could shift. Economists say the UAE will likely increase production once it’s no longer tied to OPEC limits. That could push prices down, but also make the market more unpredictable.

David Oxley of Capital Economics said the move could mean lower prices overall, but with higher volatility in the long run.

That’s the bigger question now. If more countries decide to leave, or if major producers like Saudi Arabia and Russia start acting independently, it could reshape the entire global oil system.

Kavonic warned: “Saudi Arabia will struggle to keep the rest of Opec together… This presents a fundamental geopolitical reshaping of the Middle East and oil markets.”

OPEC was founded in 1960 to coordinate oil production and stabilise prices. Over the years, it has grown and adapted, but this moment feels different.

The UAE joined in 1967. Now, nearly 60 years later, it’s stepping away to chart its own path, one focused on scale, speed, and control.

Whether this is just one country making a strategic move or the start of a wider shift remains to be seen.