What UAE’s exit from OPEC means for global oil markets

The United Arab Emirates (UAE) has opted to withdraw from the Organisation of the Petroleum Exporting Countries (OPEC) and OPEC+, with the exit scheduled to take effect on 1 May.

UAE Energy Minister Suhail Mohamed al-Mazrouei said the move follows a thorough reassessment of the country's regional energy direction and long-term priorities, reports the Khaleej Times.

According to the UAE government, the decision aligns with its broader economic and strategic outlook.

Officials pointed to an evolving energy mix, increased investment in domestic production capacity, and a continued intention to remain a stable and responsible participant in global energy markets.

What is OPEC?

OPEC was established in 1960 to coordinate petroleum policies among oil-producing nations and strengthen their position in global oil pricing.

Abu Dhabi, which later became part of the UAE following its formation in 1971, joined the organisation in 1967.

The group was created to help member states secure stable and fair oil prices while ensuring a consistent supply to consuming countries and reasonable returns for producers and investors in the petroleum sector.

Member countries

The organisation originally began with five founding members which included Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

Over time, membership has changed as countries have joined or withdrawn.

At present, OPEC consists of 11 members. Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia and Venezuela.

Saudi Arabia remains the most influential member, as it produces the largest volume of oil within the group and plays a central role in shaping production decisions.

Countries that have left OPEC

Several states have exited OPEC at different points in its history.

Qatar joined after the organisation was formed but left in 2019, citing a strategic shift towards its liquefied natural gas sector.

Indonesia has also left on multiple occasions, including departures in 2009 and 2016.

Ecuador initially joined in the 1970s, suspended its membership in the early 1990s, rejoined in 2007, and again suspended participation in 2020.

Gabon first left in 1995, later re-entered in 2016, and remains a member today.

OPEC+

OPEC+ was created in 2016 as a wider alliance that includes OPEC members along with several major non-member oil producers, including Russia.

The formation was largely driven by the need to stabilise global oil markets during a period of oversupply, particularly due to rising US shale production.

Together, OPEC members produced about 28.7 million barrels per day in 2022, accounting for roughly 38% of global crude output, according to industry estimates.

Within the group, Saudi Arabia ranked as the second-largest oil producer globally that year, after the United States, according to the US Energy Information Administration.

Implications of UAE's exit

Following its departure, the UAE is expected to continue managing its oil output in line with market demand, gradually adjusting supply as needed, according to official statements.

Market analysts suggest the move could influence how effectively OPEC manages global supply coordination.

The absence of the UAE may reduce the group's flexibility in controlling spare capacity, potentially increasing price fluctuations over time if production rises significantly, according to Madhur Kakkar, founder and CEO of Elevate Financial Services.

In the short term, however, analysts argue that global markets are likely to absorb additional supply from the UAE, given current inventory levels and the ongoing need to replenish reserves.

Over a longer horizon, questions may emerge about OPEC's ability to maintain coordinated production strategies and stable market conditions without one of its key Gulf producers.