United Arab Emirates' (UAE) decision to withdraw from the Organization of the Petroleum Exporting Countries (OPEC) as of May 1 has raised concerns about the group's influence over the oil market and its internal balance of power.
A member since 1967, the UAE has been one of OPEC's key players and has recently pushed for higher production capacity.
After investing $62 billion in production capacity, Abu Dhabi is seeking to monetize that output rather than keep it restricted under OPEC quotas, aiming to boost its oil export revenues outside the group.
The UAE's increasingly strained relations with neighboring Saudi Arabia and deepening disputes over production quotas are factors in the country’s decision to end its 59-year membership.
While the UAE needs oil prices of around $50 per barrel to balance its budget, Saudi Arabia requires nearly $90, deepening policy differences between the two countries.
- 'Losing member could structurally weaken OPEC'
Jorge Leon, senior vice president at Rystad Energy, said the UAE's decision marks a major fracture that could weaken OPEC's market influence.
He noted that alongside Saudi Arabia, the UAE is one of the few OPEC members with significant spare production capacity, the key mechanism through which the group maintains its market power.
Leon said the short-term impact may remain limited due to ongoing disruptions in the Strait of Hormuz, but warned that in the longer term it points to a structurally weaker OPEC.
"Outside the group, the UAE would have both the incentive and the ability to increase production, raising broader questions about the sustainability of Saudi Arabia's role as the market's central stabilizer and pointing to a potentially more volatile oil market as OPEC's capacity to smooth supply imbalances diminishes," he said.
- 'Beginning of end of OPEC'
Adi Imsirovic, guest lecturer of Energy Systems at the University of Oxford, described the move as a critical step that could shake the group's internal balance.
"It may well be the beginning of the end of OPEC," Imsirovic said.
He noted that the UAE had long been one of Saudi Arabia's most reliable allies and, together with Kuwait, formed part of OPEC's core structure.
The consequences of the withdrawal would become more visible after the war ends and the Strait of Hormuz fully reopens, he added.
"Core of OPEC will be smaller and it will be harder for the Saudis to control prices," Imsirovic said.
- OPEC controls 38% of global oil supply
While OPEC holds nearly 80% of global oil reserves, it accounts for around 38% of overall crude oil production. Its share in global crude exports exceeds 50%.
Founded on Sept. 14, 1960, to coordinate oil supply policies among producer countries, OPEC currently has 12 members: Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the UAE and Venezuela. With the UAE's departure, membership will fall to 11.
In a statement, UAE Ministry of Energy and Infrastructure said the decision was taken in line with the country's long-term strategic and economic vision and its changing energy profile, noting that accelerated investments in domestic energy production played a key role in this step.
The ministry said the decision to leave was mainly driven by a strategy to maximize oil production capacity, while production policies will continue to be shaped by the principles of responsibility and market stability, with global supply and demand balance remaining a key consideration.
By Humeyra Ayaz
Anadolu Agency
energy@aa.com.tr
