UAE Quits OPEC After 50 Years to Boost Domestic Oil Production

The United Arab Emirates (UAE) announced on Tuesday, April 2 that it will withdraw from the Organization of the Petroleum Exporting Countries (OPEC) after more than 50 years of membership. The decision deals a major blow to the alliance of oil-producing nations, as the UAE ranks as OPEC’s third-largest producer.

Why this matters: The departure complicates OPEC’s efforts to regulate global oil supply and stabilize prices. The UAE has long opposed production quotas imposed by OPEC’s market-management strategy, but its exit comes as an unexpected development.

Key reasons behind the move:

• The UAE cited rising energy demand over the medium to long term as a driving factor.
• The country’s energy ministry stated that the decision aligns with its long-term strategic and economic vision, including accelerated investment in domestic energy production.
• The UAE reaffirmed its commitment to market stability while pursuing a more independent role in global energy markets.

Background: Before the Iran war, the UAE was producing about 3 million barrels per day. However, due to regional conflicts, Gulf oil states have reduced output. Despite this, the UAE maintains an estimated production capacity of 4.8 million barrels per day, with potential for further growth.

Expert reactions:

“A structurally weaker OPEC, with less spare capacity concentrated within the group, will find it increasingly difficult to calibrate supply and stabilize prices.”

— Rystad Energy, research and consulting firm

Political implications: Analysts describe the move as a “politically big deal”, even if its immediate economic impact is limited due to geopolitical constraints like the Strait of Hormuz crisis.

“It’s a break with one of Saudi Arabia’s core priorities and comes as the UAE has felt the US, Israel, France, and other countries have proven to be better allies during this war than their neighbors.”

— Daniel Sternoff, Senior Fellow, Columbia’s Center on Global Energy Policy

U.S. alignment perspective: Richard Goldberg, a former Trump administration official and now a senior fellow at the Foundation for Defense of Democracies, suggested the UAE’s decision could benefit the U.S.

“Between Iran and Russia working to undermine the Gulf Arab states every day, while the U.S. demonstrates historic commitment to their defense, why stay in bed with your adversaries when you can realign with your closest oil-producing ally, the United States?”

— Richard Goldberg

Long-term outlook: Analysts argue that with global oil demand nearing a peak, producers with low-cost barrels—like the UAE—are rethinking their strategies.

“With demand nearing a peak, the calculation for producers with low-cost barrels is changing fast, and waiting your turn inside a quota system starts to look like leaving money on the table.”

— Jorge Leon, Head of Geopolitical Analysis, Rystad Energy