UAE Exits OPEC on May 1, Weakening Group's Oil Market Control

The United Arab Emirates announced on April 28, 2024, that it will leave OPEC on May 1, 2024, after nearly 60 years of membership, according to OPEC+ delegates and analysts cited in reporting on the departure. The exit marks a significant shift in the organization’s power, with the UAE described as the fourth-largest OPEC producer and the largest to depart the group.

UAE Departure and Production Impact

The UAE’s exit came as a shock to OPEC+ sources, according to five unnamed OPEC+ delegates. Before recent regional disruptions, Abu Dhabi pumped around 3.4 million barrels per day (bpd), representing approximately 3% of the world’s crude supply. The UAE’s production quota within OPEC stood at 3.5 million bpd, though the country has capacity to produce 5 million bpd of crude oil and liquids.

The departure will complicate OPEC+'s efforts to balance the market through adjustments to supply, as the group will have control over less of global production, according to four of the five OPEC+ sources cited. Once outside OPEC, the UAE will join independent oil producers such as the United States and Brazil, able to pump at will without production targets.

Capacity Expansion and UAE-Saudi Tensions

Tension has existed between the UAE and Saudi Arabia over the Emiratis’ production quota. According to Helima Croft, an analyst at RBC Capital Markets, “For years, Abu Dhabi has been looking to monetize its investment in expanding capacity.” The UAE has pursued a $150 billion investment program to expand production capacity, seeking a larger quota to reflect this expansion. However, Croft noted that the US-Israeli war on Iran has slowed these plans after drones and rockets damaged the UAE’s production facilities.

Rumors of the UAE’s exit have circulated for years amid worsening relations with Riyadh over conflicts in Sudan, Somalia, and Yemen. The UAE has also grown increasingly close to the United States and Israel.

OPEC+ Cohesion Outlook

Despite the UAE’s departure, analysts and officials indicate the broader OPEC+ alliance is likely to remain intact. Iraq, the third-largest producer in OPEC+ after Saudi Arabia and Russia, has no plan to leave OPEC+ as it wants stable and acceptable oil prices, according to two Iraqi oil officials cited on Tuesday, April 28.

Gary Ross, CEO of Black Gold Investors and a veteran OPEC observer, stated that “OPEC+ will not collapse as Saudi Arabia will still want to manage the market with the help of the group.” Ross noted that Saudi Arabia, which can produce 12.5 million bpd but has kept production under 10 million in recent years, remains the anchor of the alliance: “At the end of the day, Saudi Arabia was essentially OPEC – the only country with spare capacity.”

Helima Croft added that OPEC+ members will be more focused on rebuilding facilities hit by the war rather than embarking on production cuts in the near future, meaning “the broader OPEC+ breakup is not on the cards for now.” Jorge Leon, a former OPEC official now at Rystad Energy, stated: “The UAE withdrawal marks a significant shift for OPEC … the longer-term implication is a structurally weaker OPEC.”

Historical Context: OPEC’s Declining Market Share

OPEC’s influence over the global oil market has declined significantly over decades. Formed in 1960, OPEC once controlled over 50% of global output. As rival producers’ production grew, the group’s share declined to around 30% of the world’s total oil and oil liquids output of 105 million barrels per day last year.

The formation of OPEC+ in 2016 expanded the alliance to include non-OPEC producers led by Russia, previously one of Saudi Arabia’s top rivals. This expansion gave the group control over approximately 50% of the world’s total oil production in 2025, according to the International Energy Agency. The loss of the UAE means OPEC+ control will decline to around 45%.

The United States has emerged as OPEC’s biggest rival over the past 15 years, raising production to as much as 20% of the world’s total on the back of its shale oil boom. This shift prompted OPEC’s 2016 decision to form the broader OPEC+ alliance.

Recent Producer Departures

The UAE is the fourth producer to quit OPEC+ in recent years, though by far the largest. Angola quit the bloc in 2024, citing disagreements over production levels. Ecuador quit OPEC in 2020, and Qatar departed in 2019.

Geopolitical Context

OPEC+ membership provides countries with diplomatic and international weight, a factor analysts cite as relevant to member retention. The war between Israel and Iran has resulted in what the International Energy Agency describes as the biggest-ever global energy supply disruption in terms of outright daily oil production. The conflict has exposed discord among Gulf nations, including between the UAE and Saudi Arabia.

US President Donald Trump has accused OPEC of “ripping off the rest of the world” by inflating oil prices and has suggested the US may reconsider military support to the Gulf because of OPEC oil policies. However, it was Trump who helped convince OPEC+ to cut output in 2020 during the COVID pandemic when oil prices slumped and US producers suffered.