The United Arab Emirates will withdraw from OPEC effective May 1, marking another departure after Qatar, Angola and Ecuador in recent years, signaling continued loosening of the group's internal cohesion.

According to the UAE's official state media Emirates News Agency-WAM, the decision follows a review of the UAE's long-term economic and strategic priorities, as well as its evolving energy profile. 

UAE stressed that the country will remain a "responsible and reliable" contributor to global markets.

With supply disruptions around the Strait of Hormuz and broader volatility across the Gulf, UAE wants more room to calibrate output based on market conditions rather than collective quotas, according to the country's energy minister Suhail Al Mazrouei. He said in an interview with New York Times that the shift is ultimately about flexibility.

"The world needs more energy, the world needs more resources and UAE wanted to be unconstrained by any groups," Al Mazrouei said, adding that the timing was chosen to minimize immediate market disruption.

Tensions with Saudi Arabia move into the open

Longstanding frictions with Saudi Arabia form part of the backdrop. 

The two countries — often seen as the key anchors within OPEC — have diverged over production quotas and regional influence.

The UAE, currently producing around 4.85 million barrels per day, has repeatedly pushed to raise its baseline to reflect growing capacity, targeting 5 million barrels per day by 2027, according to various news reports. 

Zou Zhiqiang, a researcher at Institute of International Studies and Center for Middle Eastern Studies at Fudan University, told Yicai that the exit is closely tied to the broader geopolitical climate. 

As policy differences with Saudi Arabia and other producers widen, and competition extends beyond oil into geopolitical positioning, the UAE is using this moment to step outside the framework and secure greater policy autonomy, Zou said.

OPEC's collective capacity faces renewed scrutiny

The UAE has been reportedly one of the few members, alongside Saudi Arabia, with meaningful spare capacity – a key tool for stabilizing markets during supply shocks.

Jorge Leon, head of geopolitical analysis at Rystad Energy, said that the UAE's departure removes "one of the core pillars" of OPEC's market management capacity, leaving the group structurally weaker, CNBC reported.

David Goldwyn, the former US State Department's special envoy and coordinator for international energy affairs, told CNBC Saudi Arabia's ability to steer the group is now diminished, he said, even though Riyadh will still have a significant ability to discipline the market with its own spare capacity but it will have a weaker hand now that the UAE is no longer a member.

"There's significant risk of higher oil price volatility as a result of this decision," Goldwyn said, but added that when market conditions require cooperation, the UAE leaving OPEC doesn’t prevent it from cooperating with OPEC.

Limited immediate impact, deeper effects likely delayed

UAE officials have been careful not to link the exit directly to ongoing conflict. Al Mazrouei told CNBC the timing was chosen to avoid disrupting fellow producers.

Brent crude futures rose 2.74 percent to $104.48 per barrel as of the close on April 28 following the announcement, consolidating at elevated levels amid lingering geopolitical strains in the Middle East.

In an analysis on wallstreetcn.com, OPEC is now operating under a different set of constraints. Ongoing disruptions to Gulf exports have already limited the ability of producers to increase output in the short term. That, in turn, would diminish the immediate impact of the UAE's exit. The more meaningful shift may only become visible once regional tensions ease and supply conditions normalize, allowing production decisions – and divergences – to fully play out.

(Cover via VCG)