The United Arab Emirates, one of the world’s major oil producers, will leave the Organization of Petroleum Exporting Countries (OPEC/OPEC+) effective May 1, state news agency WAM said Tuesday morning.
The decision “reflects the UAE’s long-term strategic and economic vision and evolving energy profile,” WAM wrote on Tuesday, based on “our national interest and our commitment to contributing effectively to meeting the market’s pressing needs.”
The stunning move from Abu Dhabi is likely to deeply shake the oil alliance, which derives much of its power from a strong consensus and its ability to drive global oil prices through the production power of its members.
The move is also likely to be seen as a strategic victory for President Trump, who has repeatedly accused the OPEC+ bloc of manipulating oil prices and “ripping off” the US.
While Saudi Arabia has long been seen as the dominant voice among the group of 12 countries, the UAE has in recent years seen its strategic influence rise as Abu Dhabi has strengthened its oil production and its Abu Dhabi National Oil Company, which has raised the country’s international profile.
The UAE’s decision to exit the cartel comes at a markedly precarious moment for the Middle Eastern oil powers, which have seen their ability to export oil out of the Persian Gulf cut to near zero as Iran has asserted military dominance over the Strait of Hormuz, the world’s most critical chokepoint for global energy flows.
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The global oil market in April faced a 13.7 million barrel per day shortfall due to a combination of halted exports and widespread infrastructure damage from the war in Iran, according to research from Goldman Sachs. Throughout the war, Abu Dhabi has criticized fellow Gulf powers for failing to do more to protect the country from attacks by Iran.
Before the outbreak of war in the Middle East in February, the UAE had ramped its production levels up to roughly 3.6 million b/d, though that has plummeted to roughly 2.16 million b/d, according to Bloomberg data. The nation’s available capacity is roughly 4.85 million bpd, though Abu Dhabi is looking to reach 5 million b/d of capacity by 2027.
Taking the UAE’s pre-war production levels, its decision to leave OPEC means the bloc will lose roughly 12% of its total production, according to estimates from the International Energy Agency.
“Alongside Saudi Arabia, it is one of the few members with meaningful spare capacity — the mechanism through which the group exerts market influence and responds to supply shocks,” Jorge León, head of geopolitical analysis at Rystad Energy, told Yahoo Finance.
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