The United Arab Emirates has decided to exit OPEC and the larger OPEC+ group next month, marking the end of nearly 60 years of membership and signaling a significant change in the global energy landscape.
The UAE believes this move will provide it with more freedom to increase oil production and cater to the growing global energy demand, especially after making substantial investments to raise its output capacity. The energy minister noted that stepping away from OPEC would eliminate production quotas, allowing the country to follow its long-term production goals.
This decision is seen as a major setback for OPEC, which was established in 1960 to manage oil output among leading producers. Analysts suggest that this exit could diminish the cartel's influence, with one expert dubbing it "the beginning of the end" for the alliance. The UAE plays a key role in OPEC's production capacity and has generally been one of its more compliant members.
Interestingly, this decision aligns with former President Donald Trump's repeated criticisms of OPEC, where he has called for increased supply and lower oil prices. The UAE's exit might also lead to stronger energy relations with the United States.
While the short-term impact on supply may not be drastic, especially given the disruptions in the Strait of Hormuz due to ongoing regional tensions, the long-term effects could be more significant. Economists speculate that the UAE could raise its output by up to 1 million barrels per day without OPEC restrictions, which could put downward pressure on prices but also increase market volatility.
This exit comes at a time when global energy markets are already under strain, with organizations like the World Bank warning of imminent price hikes and supply interruptions tied to conflicts in the Middle East. It's expected that poorer countries will face the most severe impacts from rising energy costs.
The departure could add pressure on major producers like Saudi Arabia to keep OPEC united. Analysts caution that if other member countries decide to follow the UAE's lead, it could dramatically alter the global oil landscape and shift the balance of energy power geopolitically.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.