UAE withdraws from OPECUAE withdraws from OPEC after 58 years, citing economic interests and regional tensions
The United Arab Emirates announced on Tuesday that it will leave the Organization of the Petroleum Exporting Countries effective May 1, ending nearly six decades of membership in the oil cartel. The decision comes amid heightened regional instability, including the Iran war, the blockade of the Strait of Hormuz, and escalating tensions between the UAE and Saudi Arabia, OPEC's dominant member.
The UAE's departure signals a shift in Middle Eastern energy politics and reflects deeper fractures within OPEC itself. By leaving, the UAE can exceed production caps and increase oil output to maximize revenues and strengthen ties with oil-importing nations like China, while reducing its dependence on cartel decisions that have historically favored Saudi interests. Analysts warn the move could weaken OPEC's cohesion and encourage other members to reconsider their membership, though the cartel's eleven remaining members have not yet signaled intentions to leave.
UAE Leadership
The UAE framed its departure as a long-term strategic objective made timely by current conditions. Energy Minister Suhail al-Mazrouei stated that leaving OPEC was easier now because it would have minimal impact on other producers, and that the decision reflects the country's commitment to a responsible, forward-looking role in global energy markets. The UAE's economy is significantly tied to global economic growth rather than oil prices alone, and maximizing energy revenues is attractive given economic damage from the Iran war.
Saudi Arabia and OPEC Establishment
Saudi Arabia, which dominates OPEC and OPEC+, views the UAE's exit as a direct challenge to its leadership and a blow to cartel cohesion. The departure shifts responsibility for moderating global oil prices onto Saudi Arabia alone, while freeing the UAE to expand production and market share without cartel constraints. Analysts note the move will anger the Saudis and signals potential weakness in an organization already strained by regional conflict and fractured diplomacy.
Western Analysts
Experts characterize the UAE's withdrawal as both a geopolitical and economic move that reflects deeper Gulf rivalries exacerbated by the Iran war. Some analysts suggest the timing and positioning could appeal to US interests, and warn that if the UAE demonstrates economic benefits from leaving, other OPEC members may follow, potentially writing the cartel's obituary after 65 years.
- OPEC was founded in 1960 with just five members; the UAE's exit reduces it to eleven remaining members.
- The UAE's fiscal breakeven oil price of approximately $50 per barrel is significantly lower than Saudi Arabia's $80-$90 requirement, giving it greater production flexibility.
- The 2016 formation of OPEC+ added ten non-OPEC producers led by Russia, expanding the cartel's influence beyond traditional oil exporters.
US-Iran Ceasefire War
The United States launched military strikes against Iran on June 26, 2026, in response to a drone attack on a commercial cargo ship in the Strait of Hormuz, calling it a "foolish violation" of the 60-day ceasefire agreement signed just days earlier[2][4][14].
26 June, 09:35 PM
US launches strikes against Iran following commercial ship attack26 June, 04:47 PM
Trump calls Iran drone attack on cargo ship a ceasefire violation
