“Beginning of the End of OPEC”: UAE Exit Shakes the Global Oil Market

The United Arab Emirates has announced its withdrawal from the OPEC oil producers’ cartel after nearly six decades of membership, a move that is expected to reshape global energy dynamics and weaken the influence of the group led informally by Saudi Arabia.

The decision comes amid a period of heightened global energy instability linked to the ongoing Iran war, which has already disrupted oil and gas flows through the Strait of Hormuz. The narrow waterway, a key passage for roughly one-fifth of global crude and LNG shipments, has seen rising security risks and operational constraints due to threats and attacks.

The UAE said the exit reflects a broader strategic shift in its energy policy, with officials arguing that leaving OPEC will provide greater operational and economic flexibility. The country stated that the move aligns with its long-term development goals and evolving energy profile, while downplaying any immediate market impact despite its significance within the cartel.

“The UAE said the decision reflected its ‘long-term strategic and economic vision and evolving energy profile’,” according to official statements cited in the report.

The departure will take effect on Friday, marking the end of its participation in both OPEC and the expanded OPEC+ framework. The UAE first joined the organisation in 1967 through Abu Dhabi and remained a member after the formation of the federation in 1971.

Analysts have described the exit as a major setback for OPEC, warning it could trigger wider instability within the group. One energy analyst said the move may mark a turning point in the cartel’s cohesion and long-term relevance.

“It is the beginning of the end of OPEC,” said Saul Kavonic of MST Financial, adding that the organisation loses a significant share of production capacity and one of its most compliant members.

According to OPEC data, the UAE produces around 2.9 million barrels of oil per day, while Saudi Arabia, the group’s dominant producer, pumps roughly 9 million barrels daily. The loss of the UAE is estimated to reduce OPEC’s capacity by around 15 percent.

The development has also raised concerns about internal unity within the organisation, with analysts warning that other members could consider similar steps if tensions persist. Saudi Arabia is expected to face increased pressure to maintain production discipline and manage internal coordination.

OPEC itself was established in 1960 by five founding members, including Saudi Arabia, Iran, Iraq, Kuwait and Venezuela, with the goal of coordinating oil output and stabilising revenues. Its membership has expanded and shifted over time, but it continues to include several producers across the Middle East, Africa and South America.

The UAE’s decision also comes against the backdrop of broader geopolitical tensions in the region, including criticism from Emirati officials regarding the collective response of Gulf states to recent Iranian attacks during the conflict.

The move is being interpreted by some observers as part of a wider reshaping of energy politics in the Middle East, at a time when oil prices have surged sharply, with Brent crude reaching highs above 110 dollars per barrel during the conflict period.