Impact of UAE's Exit from OPEC: Oil Prices Could Become More Volatile

JAKARTA — The United Arab Emirates’ (UAE) decision to exit the Organisation of the Petroleum Exporting Countries (OPEC) starting 1 May 2026 has sparked major questions about the future balance of the global oil market. This move by one of the cartel’s most influential producers is seen not merely as a membership change but as potentially altering OPEC’s capacity to control supply and maintain oil price stability. The UAE has long been viewed as OPEC’s second most important member after Saudi Arabia. Head of Geopolitical Analysis at Rystad Energy, Jorge Leon, stated that Saudi Arabia and the UAE together control the majority of the world’s spare production capacity, exceeding 4 million barrels per day. “Therefore, this departure eliminates one of the core pillars supporting OPEC’s ability to manage the market,” Leon said, quoted from CNBC on Wednesday (29/4/2026). According to him, the UAE’s exit makes OPEC structurally weaker because one of the organisation’s main market management pillars is lost. He assessed that the UAE’s move also delivers a blow to Saudi Arabia as OPEC’s de facto leader. “Riyadh will still have significant capacity to regulate the market with its own spare capacity, but its position will be weaker now that the UAE is no longer a member,” said Goldwyn. The primary concern from the UAE’s exit is the reduced cohesion among producers in maintaining oil prices, especially when the market faces excess supply. Oil futures prices were also reported to have barely reacted to the announcement of the UAE’s departure from OPEC. However, in the long term, Kilduff sees the impact potentially tending to depress oil prices. According to him, the UAE’s decision to leave OPEC weakens the solidarity needed by producers to prevent prices from falling too deeply during supply surpluses.