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The United Arab Emirates has announced it will leave the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ alliance next month, ending nearly six decades of membership dating back to 1967. The UAE stated the decision would help it meet growing global energy demand in the long term.

The exit is being viewed as a significant blow to the cartel. Saul Kavonic, head of energy research at MST Financial, described the departure as “the beginning of the end” for OPEC. “With the UAE leaving, OPEC loses about 15% of its capacity and one of its most compliant members,” he said.

The move is also seen as a win for U.S. President Donald Trump, who has previously attacked OPEC for “ripping off the rest of the world.” In January, he called on Saudi Arabia and other OPEC nations to “bring down the cost of oil” and doubled down on threats to impose tariffs. The UAE’s departure also opens the door for closer ties between the two countries.

According to the latest OPEC figures, the UAE produced 2.9 million barrels of oil per day in 2024, compared to Saudi Arabia’s 9 million barrels as the cartel’s de facto leader. Experts suggest the UAE could boost its oil production by approximately 1 million barrels per day outside of OPEC.

The UAE’s energy minister said that operating without the group’s production quotas would give the country greater flexibility. The Gulf state has invested heavily in expanding its production capacity but has long chafed under OPEC’s output restrictions.

The World Bank has simultaneously warned that the war in the Middle East has caused the biggest loss of oil supply on record. World Bank chief economist Indermit Gill noted that energy prices will rise by about a quarter on average this year, and it could take six months for shipping through the key Strait of Hormuz to return to pre-war levels.

Professor David Elmes of Warwick Business School pointed out that the UAE has one of the lowest break-even prices for its oil — nearly half that of Saudi Arabia — meaning it can remain profitable even at lower price points. “So the UAE wants to sell more and is less concerned with keeping prices high,” he said.

David Oxley, chief climate and commodities economist at Capital Economics, warned that the UAE’s departure could lead to lower oil prices but higher market volatility in coming decades. The implications could be far more significant if other member states follow suit, or if Russia and Saudi Arabia decide to ramp up production in response.

Source: BBC News