UAE: UAE Chooses a Close Outsider Relationship With OPEC

What happened: The UAE’s decision to walk away from OPEC is important but not surprising. It deals a material and symbolic loss to the cartel.

Why it matters: Abu Dhabi picked its moment: The move puts the UAE first in line for post-war recovery, holds implications for Gulf solidarity (or lack thereof) and helps the Emiratis reset US relations.

What happens next: The UAE may not be out forever. Other OPEC members could leave or demand a higher price to stay, and Riyadh could loosen OPEC restrictions over the long term.

What Happened

• The UAE’s decision is important but not surprising, despite breathless media coverage. The UAE has been chafing at its OPEC quotas for years and has chosen what it views as an opportune moment to break out on its own. UAE President Mohamed bin Zayed hinted at such a move in a sit-down with Horizon Engage earlier this year.
• OPEC faces a material blow. The UAE's departure could measurably hurt OPEC at a moment of particular vulnerability for its Gulf members. The UAE's large reserves (113bn barrels) and production levels (roughly 3.3mn bpd, with plenty of spare capacity it is eager to use) mean that a valuable member has now become a competitor. This brings the wider OPEC+ alliance's market share from around 50% to 45% of global production.
• It is also a symbolic loss. This is the fifth departure in a decade for OPEC, following Indonesia (2016), Qatar (2019), Ecuador (2020) and Angola (2024). Just two countries joined in the same period: Equatorial Guinea (2017) and the Republic of Congo (2018). Neither arrival was recent, contributing to the sense that OPEC is losing momentum. That impression is only partly offset by growth in the "plus" group, formed in 2016. Since that time, one country has joined: Brazil (2025).

Why It Matters

• Abu Dhabi picked its moment. The UAE's timing has raised questions amid the Iran war and the Hormuz crisis. In our view, Emirati leaders effectively made up their minds on this move months ago and were waiting for a period of high oil prices, when the blow to their fellow producers would be less direct, so they would face less blowback. The Hormuz crisis provides such a moment.
• This puts the UAE first in line for recovery. More importantly, the timing (and the brisk three-day notice Abu Dhabi provided for its announcement) also gives the UAE a chance to be first out of the gate among Gulf producers looking to rebound from this spring's crisis. While the Hormuz situation is far from resolved, the UAE can now begin expanding production and exports from Fujairah Port on the Gulf of Oman to respond to excess market demand (particularly from Asia) that cannot be met while barrels remain blockaded. Breaking out now also puts it in pole position for a quick ramp-up once Hormuz traffic resumes — this last point will be least appreciated by fellow Gulf producers like Kuwait and Iraq.
• This move holds implications for Gulf solidarity, or lack thereof. Throughout the Iran war, the GCC states' ability to hold a common line toward Iran, the US and the rest of the world has been a key indicator we have been monitoring to assess the course of the conflict and especially the recovery to follow. The UAE and Saudi Arabia entered this period already at odds over Sudan, Yemen, Somalia and other regional conflicts. (As we wrote at the time, the friction was overblown but not to be dismissed entirely; see our 23 February 2026 Latest Analysis). Since then, they have had their differences, for example, when jostling earlier this week over relations with conflict mediator Pakistan. Abu Dhabi's exit from the cartel will anger OPEC leader Saudi Arabia but not poison the relationship, which is deeper and more complex than most outsiders appreciate.
• It helps the UAE reset US relations. This move will be appreciated in Washington, where the Trump administration views OPEC as an obstacle to its vision of US “energy dominance.” It’s the second recent signal to Washington, following Abu Dhabi’s surprise request this month for a currency swap line. We see that move as a motion to Trump that the UAE is willing to maintain, or even deepen bilateral ties — but only if the US puts more skin in the game. The ultimate goal is to rebalance relations in the context of the war, giving Abu Dhabi greater say in the terms of peace and in the post-war period, when the UAE could lean heavily into the US partnership on tech, energy and more — or could look elsewhere.

What Happens Next

• The UAE may not be gone for good. The UAE could return to OPEC or at least OPEC+. There is precedent: Ecuador, Gabon and Indonesia all returned to the OPEC fold after leaving in the past (though only Gabon remained in). More likely, Mohammed bin Salman (MBS) could coax the UAE back into a looser OPEC+ alliance, which would ensure coordination and alleviate Saudi worries about having a rogue competitor on its doorstep.
• Others could leave or demand a better price for staying. As OPEC's market share slips, the incentive for producers to remain constrained by its production quotas weakens. Iraq, which faces severe fiscal pressure and higher production costs than some of its OPEC peers, is rumored to be wavering. Amid the OPEC+ group, Kazakhstan has been flouting quotas in recent years, and media has speculated that it may exit. In our view, a more probable outcome is raising the country’s quota, especially because Kazakhstan’s government does not control production at its major PSAs. Recently, Kazakh officials have suggested they have no plans to leave. The coalition's weakness could also prompt Saudi Arabia to push for tighter discipline, though this could spark a self-reinforcing downward spiral. Iraq might have more leverage over Riyadh in the future as it seeks better quotas, and Libya and even Iran might negotiate more exemptions or other concessions.
• Riyadh could go with the flow. Abu Dhabi is signaling that it is far enough into its diversification from oil dependence that it does not need a certain price for a commodity it believes has diminishing long-term relevance. Saudi Arabia is not there yet — not by a long shot — but Riyadh has previously toyed with the idea of not subsidizing a stable oil price out of its own pocket. If being the swing producer becomes too costly, MBS could opt to maintain market share by favoring OPEC+’s looser coordination model. In this scenario, Riyadh would reduce its control over individual members but widen the tent further, potentially integrating up-and-coming producers like Namibia and Guyana in several years' time and even reintegrating the UAE one day. Looking ahead, that seems to be a more workable model that will allow the cartel to regain market share without dissuading foreign investment.