UAE will leave OPEC on May 1 as the energy crisis exacerbates tensions in the Gulf

The UAE has announced its decision to exit OPEC on May 1, in light of escalating tensions in the Gulf region.

The United Arab Emirates has declared its intention to exit the Organization of the Petroleum Exporting Countries (OPEC) on May 1, marking a notable setback for the oil producers’ alliance as the ongoing Iran war highlights increasing rifts among Gulf states.

The exit of the UAE, a significant producer within OPEC, is anticipated to diminish the organization’s sway over global oil supply and exacerbate a growing divide with Saudi Arabia, the group’s de facto leader. Abu Dhabi could potentially increase production once exports through the Gulf stabilize, as it would not be constrained by OPEC quotas.

For the first time since the announcement, UAE Energy Minister Suhail Mohamed al-Mazrouei addressed the public, stating that the decision came after a thorough review of the national energy strategy.

“This is a policy decision that has been made after a thorough examination of current and future policies concerning production levels,” Mazrouei stated in a telephone interview.

He said the UAE acted alone and didn’t consult other countries before making the decision.

Mazrouei highlighted the increasing global energy demand, indicating that the UAE is preparing to address future supply requirements.

Following the announcement, he minimized the potential for immediate market disruption, referencing persistent constraints in the Strait of Hormuz—a vital shipping route that usually accommodates about a fifth of the global oil and liquefied natural gas supply.

“I do not anticipate significant immediate market effects,” he stated, pointing to the challenges Gulf producers encounter in exporting crude amid Iranian threats and assaults on vessels.

The bottleneck has already diminished OPEC+’s portion of global output. The International Energy Agency reports that the group’s share decreased to 44 percent in March, down from approximately 48 percent in February, with additional declines anticipated due to ongoing production disruptions and the exit of the UAE.

The action is regarded as a political and economic victory for U.S. President Donald Trump, who has consistently criticized OPEC. During a 2018 speech at the United Nations General Assembly, Trump criticized the organization for “ripping off the rest of the world” through inflated oil prices. He has also contended that OPEC members gain unjustly from U.S. military protection while maintaining elevated prices, which he believes undermines fair competition in the global oil market.

Experts suggest that the UAE’s exit may ultimately serve the interests of consumers and global markets.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, stated: “This move paves the way for the UAE to capture global market share once the geopolitical situation stabilizes.”

In a similar vein, Jorge Leon from Rystad Energy emphasized the UAE’s distinctive role as one of the rare OPEC (Organization of the Petroleum Exporting Countries) members possessing spare production capacity, which refers to the ability to increase oil production quickly if needed.

“Outside the group, the UAE would possess both the motivation and the capacity to boost production, prompting wider inquiries regarding the sustainability of Saudi Arabia’s position as the market’s primary stabilizer,” he stated.

The decision highlights an escalating rivalry between Abu Dhabi and Riyadh. The two Gulf powers, once close allies, have increasingly found themselves at odds over oil policy, regional geopolitics, and the competition for foreign investment and talent.

The UAE, recognized as a significant business center and a crucial ally of the U.S., has actively engaged in a bold foreign policy throughout the Middle East and Africa. Following the onset of hostilities during the Iran conflict, it has fortified its relationships with Washington and Israel, formalized through the Abraham Accords. Abu Dhabi perceives this move as a strategic avenue for regional influence and enhanced access to the United States.

On Tuesday, Gulf leaders gathered in Saudi Arabia for a summit focused on coordinating a response to the increasing Iranian missile and drone attacks, which have surged since U.S. and Israeli forces initiated strikes on Iran in late February.

The departure of the UAE signifies a crucial change in the global energy scene, carrying possible lasting effects on oil markets, regional partnerships, and the future unity of OPEC.