Analysts Weigh Impact on Oil Supply as UAE Leaves OPEC

The United Arab Emirates (UAE) has walked away from OPEC, removing one of the Persian Gulf’s most important producers from a quota system dominated by countries in the Arabian Peninsula, especially Saudi Arabia.

The UAE announced on April 28 that it would exit OPEC and the wider OPEC+ alliance, effective May 1.

For more than six decades, OPEC’s central purpose has been to have producers agree to limit oil output to support prices.

But analysts raised questions about how much control the cartel can still exert over global oil supply, whether the immediate price impact may be limited by the current geopolitical shock, and whether the longer-term implications for OPEC could be significant.

A New Energy Age

In a government statement, published by the Emirati state-run news agency WAM on April 28, the UAE said it sought a “sovereign responsibility in a new energy age.”

It said that near-term volatility, including disruptions in the Persian Gulf and the Strait of Hormuz, continues to affect supply dynamics, and that underlying trends point to “sustained growth in global energy demand over the medium to long term.”

The move comes at a time of heightened uncertainty in global energy markets, amid the Iran war and disruption risks in the Strait of Hormuz, which are distorting the near-term picture.

The UAE has been one of the group’s most important producers and holds significant spare capacity, enabling it to increase output if it chooses to move beyond OPEC quota limits.

OPEC’s 2025 Annual Statistical Bulletin states that proven crude oil reserves in OPEC member countries remained flat at 1.24 trillion barrels at the end of 2024, while global proven crude oil reserves stood at 1.57 trillion barrels.

The Trump Vision

Samuel Furfari, a senior official at the European Union’s Energy Directorate-General from 1982 to 2018, told The Epoch Times that the UAE’s move signaled a new era of energy geopolitics that was “proud of fossil fuels.”

“More and more the oil producers, including the oil industry, start to realize that it’s time to speak loudly that fossil fuels are necessary for our future, and the one which encouraged them to do so is [U.S. President] Donald Trump,” Furfari said.

U.S. President Donald Trump’s “drill, baby, drill” approach to energy had shifted the debate, making it easier for oil producers to speak openly about the benefits of fossil fuels.

On April 29, Trump welcomed the UAE’s decision to withdraw from OPEC and said he believes that it could help lower oil prices.

“I think it’s great,” Trump said ​when asked by reporters at the ​White House what he thought of the UAE’s decision.

“OPEC is a cartel,” Furfari said. “They do not like to be called a cartel, but it’s, in fact, a cartel because they could produce more. … They do not want [that] in order to keep the price high.”

Furfari said the UAE had the capacity to produce significantly more oil but had been constrained by OPEC quotas.

“And for example, the [UAE] can produce nearly one-third more oil than what they are producing today,” he said. “They can increase their production by 1.3 [million] to 1.5 million barrels a day. [But] because of the OPEC counter, they cannot.

“They have the courage to say, ‘We will leave to produce more because the market needs more.’ The market needs more because the development is going on everywhere in the world, but also the fact that USA is taking the lead in oil production.

“And so the USA is today, is the first oil producer in the world and the Emirates say, ‘Why should I refrain [from] producing my oil when [the] USA is producing 15 million barrels a day?’”

Furfari said this was the main reason for the UAE’s departure, along with a recognition that the world had changed and that oil production can no longer be controlled in the same way.

He said major producers remain in OPEC. The remaining countries include Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Libya, Algeria, Nigeria, Equatorial Guinea, Republic of the Congo, and Gabon.

“The world can run without all their control,” he said. “And therefore there are much more oil producers today.”

Sovereign Right to Withdraw

OPEC has lost producers before. Member countries have the sovereign right to withdraw from the organization and this requires no approval.

For example, Qatar left in 2019 to focus on gas, Ecuador withdrew in 2020, and Angola left in January 2024 after a dispute over production quotas.

Indonesia has also moved in and out of the group, suspending its membership in 2009, reactivating it in January 2016, and suspending it again later that year after it could not comply with OPEC production cuts as a net oil importer.

The US and Israel

Maleeha Bengali, CEO and portfolio manager of MB Commodities Capital, told The Epoch Times by email that the UAE’s move should be viewed through the lens of shifting regional alliances.

“The UAE has been moving away from region post Abraham Accords in 2020, it is now more with the US and Israel,” she wrote. “This war has sealed the deal.

“We have seen in the last few weeks how Saudi Arabia is aligning with Pakistan and Turkey, which means it’s closer to Egypt, China, and Iran. This is also why UAE wants to do its own thing.”

Amin Aslam, CEO and founder of Decarbeon, told The Epoch Times via email that the UAE’s departure can be seen as a commercial mismatch between its production capacity and OPEC quota constraints.

“I’ve lived in the UAE for 40 years and have been in the energy sector for over 25 years,” he said. “Much as the world would want to frame it, to me, this isn’t a political story. It’s a commercial one, and I can tell you that it’s been coming for a long time.”

Aslam pointed to Abu Dhabi National Oil Co.’s expansion, with capacity reaching about 4.5 million barrels per day and a target of 5 million by 2027, backed by major investment. However, actual output has remained below 3 million barrels per day for years because of OPEC constraints.

“That gap was always going to break one way or the other,” he said, noting that additional UAE supply could gradually weigh on prices once disruptions around the Strait of Hormuz ease.

UAE Outgrowing OPEC

Aslam said OPEC’s influence has been declining, with its share of global crude output falling below 40 percent. He added that repeated member exits—Qatar, Ecuador, and Angola—are weakening its pricing power.

“Now the UAE,” Aslam said. “Each exit slowly chipping away at the cartel’s pricing power.”

He noted that the UAE has already positioned itself to operate more independently, with Murban crude trading as its own benchmark and major buyers such as India and China purchasing directly.

However, in the near term, prices are being driven more by geopolitical risks than cartel dynamics.

“This is not the UAE leaving OPEC,” he said. “In my opinion, the UAE outgrowing it.”

Freedom to Make Oil Deals

Vince Stanzione, CEO of UK-based First Information, told The Epoch Times via email that OPEC’s influence has eroded over time, weakened by the rise of U.S. shale production, renewable energy, and uneven compliance among member states.

“OPEC+ has already lost a lot of its cartel clout over the years,” he said.

Stanzione said the UAE’s exit reflects diminishing returns from OPEC membership, giving it more freedom to price its oil and strike bilateral deals.

He noted that although the move could weigh on prices over time, near-term markets remain driven by geopolitical risks, including uncertainty in the Strait of Hormuz.

“I don’t expect the UAE to flood the market with cheap oil, but it now has the freedom to make bilateral oil deals without the restraint of quotas,” he said.

OPEC did not respond to a request for comment.

Tom Ozimek and Reuters contributed to this report.