UAE's Exit from OPEC Causes Stir: What Are the Impacts on the World?

The surprising move by the United Arab Emirates (UAE) to exit the Organisation of the Petroleum Exporting Countries (OPEC) this week is predicted to weaken the cartel’s influence and that of its leader, Saudi Arabia, in the global oil market. Citing a report from CNBC International, this development could exert pressure on oil prices in the long term, as the UAE is the second most influential member after Saudi Arabia.

Jorge León, Head of Geopolitical Analysis at Rystad Energy, explained that the UAE is one of the few members with significant spare production capacity to influence prices and respond to supply shocks. Spare capacity refers to idle production that can be quickly activated to address major crises, where Saudi Arabia and the UAE together control the majority of the world’s spare capacity, exceeding 4 million barrels per day.

“The UAE’s departure removes one of the main pillars underpinning OPEC’s ability to manage the market. As a result, OPEC will be structurally weaker,” León said in a note cited on Wednesday (29/4/2026).

David Goldwyn, former US Department of State Special Envoy for International Energy Affairs from 2009-2011, described this as a severe blow to Saudi Arabia, as it damages their ability to manage OPEC as an organisation. Goldwyn noted that although Riyadh still has significant capacity to discipline the market with its own spare capacity, their position will be much weaker without the UAE’s presence.

“Riyadh will still have significant capacity to discipline the market with its own spare capacity, but their position will be weaker now that the UAE is no longer a member,” Goldwyn stated.

The UAE’s official exit from OPEC, scheduled for this coming Friday, follows weeks of missile and drone attacks by fellow member Iran, which have hindered UAE oil exports through the Strait of Hormuz. Nevertheless, UAE Energy Minister Suhail Al Mazrouei emphasised in an interview that the timing of the exit announcement was chosen to minimise disruptions to fellow producers within the group.

“The UAE’s resignation has been timed to limit disruptions to fellow producers in the group. We want greater freedom in making production decisions without OPEC constraints to achieve a capacity target of 5 million barrels per day by 2027,” Al Mazrouei said.

John Kilduff, founder of Again Capital, added that the UAE’s departure could have a negative (bearish) impact on future prices by damaging the cohesion needed among producers to prevent prices from falling too low during supply surpluses. Meanwhile, Andy Lipow, President of Lipow Oil Associates, highlighted the UAE’s frustration with Saudi-led production cuts over the years, while other members like Iraq and Russia frequently violated their quotas.

“When the US-Iran conflict ends and the Strait of Hormuz is reopened, I expect the UAE to produce as much oil as possible, utilising the spare capacity they have held back,” Lipow remarked.

Although oil futures prices have not reacted sharply to the announcement on Tuesday, Goldwyn warned of the risk of higher oil price volatility in the future. He stressed that the market may lose Saudi Arabia’s ability to set a price floor if oil demand weakens and a large surplus occurs later.

“There is a significant risk of higher oil price volatility as a result of this decision. However, ultimately, when market conditions require cooperation, the UAE’s exit from OPEC does not prevent them from still working with the organisation,” Goldwyn concluded.