Written by: BiBi News
On April 28, 2026, the United Arab Emirates issued a statement through its national news agency WAM, officially withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) and its extended alliance OPEC+ effective May 1.
This member, which has been part of the organization for nearly 60 years, produces approximately 3.6 million barrels per day, accounting for about 12% of OPEC’s total output, making it the third-largest oil producer after Saudi Arabia and Iraq.
After the exit, OPEC member countries will be reduced from 12 to 11, and the organization’s share of global crude oil supply will decline further from approximately 30% to around 26%.
This is the largest exit of members that OPEC has experienced in recent years.
From Foundation to Core: 60 Years of the UAE
OPEC was initially founded in 1960 by five countries—Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela—with the primary goal of coordinating production and safeguarding the shared interests of oil-exporting nations.
In 1967, the Emirate of Abu Dhabi joined as an independent entity, and four years later, the UAE inherited this membership upon its founding.
In the decades that followed, the UAE expanded its energy footprint significantly through large-scale capital investments by Abu Dhabi National Oil Company, and its proven reserves have now reached 113 billion barrels, ranking sixth globally and accounting for approximately 6% of the world’s total reserves.
Entering the 2020s, the United Arab Emirates' daily crude oil production stabilized around 3.6 million barrels, reaching a historical high of nearly 4.12 million barrels in 2022.
Meanwhile, ADNOC continues to advance its expansion plan, aiming to increase production capacity to 5 million barrels per day by 2027, with cumulative investments exceeding $150 billion.
Production capacity is increasing, but how much can be sold and how it is sold is not entirely up to the UAE.
Long-term tension between quotas and capacity
The core mechanism of OPEC's operation is the quota system.
Each member is allocated a production ceiling based on its capacity, historical output, and market forecasts; exceeding this limit is theoretically considered a violation.
This mechanism helps maintain market stability during periods of high oil prices, but it acts as an invisible ceiling on revenue for members with rapid production capacity expansion.
The situation in the UAE is exactly like this. The latest quota is approximately 3.41 million barrels per day, while actual production has approached 4.85 million barrels per day, leaving a gap of about 1.4 to 2 million barrels per day.
Based on international oil prices of $70 to $80 per barrel, the suppressed capacity represents an annual potential revenue loss of $46 billion to $58 billion.
The conflict between the UAE and OPEC peaked in 2021.
At that time, demand began to rebound after the COVID-19 pandemic, and OPEC members discussed whether to continue production cuts; the UAE explicitly rejected the existing quota and demanded that the baseline be raised from 3.2 million to 3.8 million barrels.
Negotiations remained deadlocked for two weeks, until Saudi Arabia ultimately allowed the UAE to increase its quota to 3.65 million barrels.
Since then, the UAE has routinely exceeded its production quota on an operational level, with daily output exceeding the quota by hundreds of thousands of barrels becoming standard in 2024.
There have been precedents before exiting.
In the history of OPEC, member withdrawals are not new.
Indonesia joined in 1962, subsequently withdrew and rejoined, before leaving again in 2016.
Ecuador withdrew in 2019.
After becoming the world's largest liquefied natural gas exporter, Qatar announced its departure in 2019, citing a strategic shift toward natural gas over oil.
Angola withdrew in 2024, for the same reason of dissatisfaction with quota allocation.
But the UAE is not on the same scale as these countries.
When Qatar exited, its daily production was approximately 600,000 barrels, Angola around 1.1 million barrels, and the UAE nearly 3.6 million barrels—several times the combined output of all previous exiting members.
This is because the UAE has a more diversified economy and is less dependent on high oil prices to balance its budget, making it more inclined to prioritize volume over price.
The war disrupted the rhythm, but it is not the fundamental cause.
On February 28, 2026, the United States and Israel launched military strikes against Iran, and the resulting conflict quickly spread throughout the Gulf region.
The Strait of Hormuz, the world’s most critical oil transit route, normally handles about one-fifth of global crude oil and liquefied natural gas shipments, but as the conflict escalates, the strait has effectively been shut down.
The UAE's exports were almost immediately severely impacted. Although an overland pipeline has been built to bypass the Strait of Hormuz, with a maximum capacity of about 1.8 million barrels per day, this is far insufficient to offset the losses caused by the disruption of maritime shipping.
In March 2026, its crude oil daily production plummeted to approximately 1.9 to 2.34 million barrels, a decline of about 35% to 47% compared to the pre-war level of 3.6 million barrels. In comparison, Saudi Arabia’s decline during the same period was around 23%, while Iran, as a party to the conflict, saw a production drop of only about 6%.
Data from the International Energy Agency shows that OPEC+'s share of global oil production declined from approximately 48% in February 2026 to 44% in March, with further declines expected in April and an additional reduction in May as the UAE officially exits.
The disruption of the Strait of Hormuz is a catalyst, but it is merely a catalyst.
UAE Minister of Energy Suhail Al-Mazrouei explicitly stated that this decision was made after a comprehensive assessment of the UAE’s oil production policies and current and future capacity, with policy considerations predating the current geopolitical tensions.
What changes will occur in OPEC's structure?
Assess the practical significance of the UAE's exit from OPEC, with the core metric being spare capacity.
Idle capacity refers to backup production that can be quickly brought online in a short period of time and serves as the most important stabilizer in oil markets during supply shocks. Globally, the total effective idle capacity is approximately 4 to 5 million barrels per day, with a significant portion concentrated in Saudi Arabia and the United Arab Emirates.
After exiting, this portion of the UAE's spare capacity will no longer be subject to OPEC quotas and will be able to operate independently of the organization's decision-making system.
The UAE is the only OPEC member besides Saudi Arabia with substantial spare capacity; after its exit, OPEC’s overall production control capability will decline, and with continued output increases from non-OPEC producers, particularly the United States, the room for coordinating supply will further narrow.
The United States currently produces over 13 million barrels per day, higher than Saudi Arabia's approximately 9 million barrels, which has significantly weakened OPEC's bargaining power in recent years.
Saudi Arabia will now be nearly the only member within OPEC with large spare capacity, bearing a heavier burden in managing the market but with fewer mobilizable support resources.
On the day of the announcement, how did oil prices move?
On the day the news was announced, Brent crude oil futures initially dipped briefly but still rose approximately 2% from the previous day's closing price, trading above $111 per barrel.
The Strait of Hormuz remains effectively blockaded, and the UAE cannot substantially increase exports in the short term; exiting OPEC has nearly zero impact on immediate supply. Oil prices remain largely driven by geopolitical risks, more than 50% above pre-war levels in February 2026.
However, in the medium to long term, once the strait returns to normal, the expectation of the UAE's independent production increase will exert downward pressure on prices.
The futures market reacts relatively cautiously to medium- and long-term developments. If the UAE delivers on its target of 5 million barrels per day in production capacity and significantly increases output, the additional supply would account for approximately 1% to 2% of global demand—a magnitude sufficient to influence price movements during periods of supply-demand balance.
UAE's next production increase roadmap
After exiting, the UAE can make its own production decisions without being bound by quotas. The pace and scale of production increases will primarily depend on when the Strait of Hormuz reopens, the progress of Abu Dhabi National Oil Company’s capacity expansion, and the demand conditions in major global consumption markets.
ADNOC has been expanding its upstream investments over the past few years, with recoverable capacity nearing 4.85 million barrels per day. The target of 5 million barrels per day by 2027 was set long ago; the true significance of the exit lies in allowing this capacity to be released freely onto the market.
The UAE also has the Habshan pipeline, which connects inland oil fields to the Fujairah port, bypassing the Strait of Hormuz and entering the Gulf of Oman, with a maximum daily capacity of approximately 1.5 to 1.8 million barrels. In the absence of normalized passage through the strait, this pipeline represents the UAE’s current limited export route, but it is insufficient to support full production increases.
The World Bank report states that the oil supply loss caused by the conflict in Iran is the largest on record, with global energy prices expected to rise by approximately a quarter this year, and it is estimated that it will take six months for the strait to return to pre-war levels.
This time window will also be a critical period for the UAE to adjust its pace and significantly increase production.