The United Arab Emirates has announced it will withdraw from OPEC and the broader OPEC+ next month, ending nearly six decades of membership.
Authorities say the move is intended to give the country greater flexibility in managing its oil production, following significant investments aimed at expanding capacity. By operating outside the group’s quota system, the UAE will be able to respond more freely to global energy demand.
The decision is widely viewed as a major development for the oil market. Some analysts consider it a significant setback for OPEC, which could lose influence as one of its key and historically compliant members exits. The UAE currently contributes a notable share of the group’s production capacity.
Founded in 1960, OPEC was created to coordinate oil output among major exporting countries to stabilise prices and ensure steady revenues. The UAE joined in 1967, and its departure will reduce the cartel’s membership and potentially weaken its ability to manage supply collectively.
The move comes amid heightened global energy tensions, partly linked to disruptions around the Strait of Hormuz, a critical corridor through which a large portion of the world’s oil supply typically passes. Ongoing instability in the region has already contributed to rising energy prices and reduced shipping volumes.
Economists suggest the UAE’s exit will not immediately affect supply due to current disruptions, but it could lead to increased production over time. The country has long sought to raise output and may now do so without being constrained by group limits.
The decision also carries geopolitical implications. It could strengthen ties with the United States, whose president Donald Trump has previously criticised OPEC and called for lower oil prices.
Experts warn that the long-term impact may include greater volatility in oil markets. If other producers follow the UAE’s example or increase output independently, OPEC’s influence over pricing could diminish significantly.
Despite its relatively smaller production compared to countries like Saudi Arabia, the UAE is considered a low-cost producer. This allows it to remain profitable even at lower oil prices, reinforcing its strategy to prioritise higher output over price control.
Analysts say the move reflects a broader shift in global energy dynamics and could signal a gradual reconfiguration of alliances within the oil-producing world.
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