UAE Leaves OPEC, Shaking the Oil Market
The United Arab Emirates (UAE) has announced that it will leave the Organization of the Petroleum Exporting Countries (OPEC) after nearly 60 years of membership. The country, which is OPEC's third-largest oil producer, plans to formally exit on 1 May 2026. Its energy ministry said the move would give the UAE more freedom to act in a new energy age. The decision comes during the ninth week of the war between the United States, Israel, and Iran, which has blocked about a fifth of the world's seaborne oil from passing through the strait of Hormuz and has pushed prices to record highs.
Tensions inside OPEC have been growing for years. The group's production limits had capped UAE output at between 3 and 3.5 million barrels per day, although the country can produce up to 4.8 million. Officials in Abu Dhabi were unhappy about losing income to support a system led mainly by Saudi Arabia. The recent war has made these tensions worse: a senior UAE adviser publicly criticised other Gulf states for not protecting his country from Iranian attacks. Analysts also say the UAE wants to sell its oil reserves before the world shifts away from fossil fuels.
The decision could change the global oil market. The UAE plans to slowly raise production to about 5 million barrels per day. Experts at Rystad Energy warn that OPEC will become structurally weaker in the long term. Saudi Arabia might respond with a price war, which the UAE's diversified economy could survive but which could badly hurt poorer members. US President Donald Trump welcomed the news; last week he said the two countries had discussed a currency-exchange deal. With oil already near $111a barrel, drivers around the world may soon see higher prices at the pump.