Why Did the UAE Leave OPEC?

Lindsey Zhao — May 12, 2026

On April 28, in the midst of skyrocketing oil prices due to the U.S.-Iran war, the United Arab Emirates (UAE) announced that it would be leaving OPEC after 59 years in the group. OPEC, or the Organization of Petroleum Exporting Countries, will be left weakened, losing 15% of its oil exporting capacity and the world’s 8th largest oil producer. To the casual news-reader, it was a surprising move—the UAE didn’t even inform the oil cartel’s de facto leader, Saudi Arabia, prior to their public withdrawal announcement.

But what exactly is the UAE’s role in OPEC, and why did many experts consider this move entirely predictable?

OPEC is a permanent intergovernmental organization whose goal is to coordinate petroleum policies and pursue oil price stability among member states (primarily by setting agreed-upon production quotas). It was created in 1960, and since then, OPEC has become one of the most influential players in energy markets, controlling about 30% of global petroleum supply. In essence, they are an international oil cartel; because they collude to supply a more limited amount of oil to the international market, they are able to effectively raise market prices and harvest more revenue from oil. After the UAE’s departure, OPEC now has 11 members: Saudi Arabia, Algeria, the Republic of Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria and Venezuela.

The UAE is important to OPEC’s global influence because they are one of the few countries that have enough production capacity to store spare oil reserves beyond its quota, which can be used by OPEC to increase oil supply and stabilize prices during supply shocks. For example, in response to the war in Iran’s impact on global oil supplies in April, OPEC members said they would raise oil production quotas by 206,000 barrels a day (although it had little practical effect due to the closure of the Strait of Hormuz, a key oil shipping route).

In his first public comments since the announcement, UAE Energy Minister Suhail Mohamed al-Mazrouei said that his country’s decision to leave OPEC was “a policy decision, … done after a careful look at current and future policies related to level of production.”

Now that the UAE has left, it can independently decide how much oil they produce and sell. This would theoretically increase competition in global oil markets and increase supply, which should decrease prices slightly in the economic short-term since they are such a large producer.

There are a few reasons why international energy experts were unsurprised to hear of the UAE’s announcement.

First, although the UAE currently produces around 3.5 million barrels a day due to restrictive OPEC quotas, they have recently been investing in the capacity and technology to churn out over 5 million barrels. Why do so? The UAE is increasingly concerned that the green energy revolution will create a permanent slide in “real” fossil fuel prices. In the meantime, they’re trying to maximize revenue from oil to fund their economic diversification before it’s too late—and oil assets are so devalued they’re better left in the ground. Even with lower oil prices caused by their withdrawal, the UAE is in a unique position to still make profits because they have one of the world’s lowest break-even prices for oil extraction.

The second reason has to do with the UAE’s foreign policy priorities. Differences over regional conflicts in Somalia, Sudan, and Yemen have made cooperation with OPEC’s de facto leader, Saudi Arabia, increasingly difficult. Yasser Elguindi, an energy fund portfolio manager who regularly attends OPEC meetings, noted on an energy policy podcast, “The UAE’s probably been the most destabilizing force within OPEC for the past five years. Every year, it feels like we come to a meeting and there’s some sort of tension or drama with the UAE threatening to leave.” It seems like their personal rivalry with Saudi Arabia has become too much to bear. The UAE has also been attempting to strengthen relations with the US and Israel. President Trump has repeatedly criticized OPEC’s cartel-like behavior for keeping energy prices high and welcomed the UAE’s latest move, likely opening the door for closer relations.

The third major reason is that oil is not as singularly important to the UAE’s economy as it once was. Instead, the general stability and economic growth of global markets are far more vital to a country that has spent decades putting its oil revenues into sovereign wealth funds (SWFs) worth a staggering $1.7 trillion. With assets managed across state-led investment groups like the Abu Dhabi Investment Authority, the UAE’s SWFs report a powerful 20-year return of ~6.3%. Because their returns depend on diverse assets in public markets, real estate, infrastructure, artificial intelligence, green energy, government bonds and more, the UAE has a new interest in the stability of the global economy as a whole. Without these massive asset investments, the UAE had an incentive to simply accept the economic loss these assets took when oil shocks hit, because it had greater oil export revenue to make up for it.

Finally, some experts argue this was actually the perfect time for the UAE to leave: because of the supply constraints caused by the closure of the Strait of Hormuz, the UAE’s announcement would cause minimal market price disruptions and avoid immediately overwhelming the market with excess UAE oil capacity.

For now, it’s almost impossible to predict what OPEC’s influence will look like going forward. It depends on a variety of factors, including whether Saudi Arabia will be able to enforce OPEC’s production quotas without one of its most compliant members, how flexible OPEC’s oil capacity strategy can become, how soon the war in Iran ends and even the success of the green energy revolution. OPEC has faced the loss of key members of the group before. Now, it is up to the remaining members to chart their course forward.

Read more here:

Extemp Analysis by: Lindsey Zhao

Q: Should the UAE have left OPEC?

The easy way out would’ve just been to use the question posed in the title…but I’ll use this question instead (they’re basically the same thing).

The important thing in this question is to clearly establish a framework for what the UAE values—and remember, you’re thinking from the perspective of what is “good” for the UAE, not for the United States or anyone else.

AGD: A joke would work great here. Just stay away from crude humor…

BG: Set up what the UAE values. Money? Global influence? Being an industry leader? Also, explain SIMPLY what OPEC is.

SOS: Nice place to put some numbers about what happens when OPEC leaves, like how large the UAE’s oil production is or something.

I’d answer like this, similar to the article:

Yes, since it sets them up to be an economic powerhouse

outcompete OPEC (due to lower break-even price, greater profit share)
strengthen ties with the US (they approve of leaving OPEC, could open the door for a LOT of economic deals)
supports their SWFs (greater flexibility to influence market on its own to stabilize assets to their preferences)