The United Arab Emirates’s withdrawal from OPEC and the expanded OPEC+ alliance is set in a context of strong energy and geopolitical tensions, marking a major turning point in the global oil governance architecture.
Amid the new regional war, tensions around production quotas set by OPEC+ have intensified. These quotas, designed to regulate barrel prices by limiting supply, are increasingly contested by some producing states who believe they constrain their economic growth potential and energy sovereignty.
In the current context, a UAE exit could lead to greater production autonomy. In the short term, logistical and geopolitical constraints, especially around the Strait of Hormuz, would remain crucial.
In the longer term, increased production could boost global oil supply and exert downward pressure on prices. However, the impacts of such an exit are not limited to oil markets alone but also extend to regional geopolitical balances.
OPEC: An organization founded to defend producer interests
Established in 1960 in Baghdad by five founding countries – Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela – OPEC initially aimed to coordinate oil policies to stabilize prices and defend producer countries’ interests against major international companies.
The UAE, through the Emirate of Abu Dhabi, integrated into this dynamic even before the federation’s official formation in 1971. Their position within the cartel had long been aligned with the Gulf’s major producers, especially Saudi Arabia.
OPEC+ was created in December 2016 in response to falling oil prices due to global oversupply. OPEC allied with large non-member producers, including Russia, to coordinate production. This agreement marked a major evolution in global oil governance, targeting supply excess reduction and stabilizing crude prices.
However, the global energy balance has significantly shifted over the past two decades.
The Rise of the United States and the Weakening of the Cartel
One of the major upheavals for OPEC+ is the emergence of the United States as the world’s top oil producer. Thanks to the shale oil revolution, Washington transformed the global energy market.
Since 2017, the U.S. has broken several historical production records, reaching around 13 million barrels per day in 2023. This rise has reduced the effectiveness of OPEC+’s quota policies by increasing independent competitive supply.
Gradually, the organization’s ability to durably influence global prices has weakened, even though it retains a structuring role.
Historical Exits and Strategic Repositioning
The UAE’s withdrawal is not an isolated case in the organization’s recent history. Several states have already left or suspended their participation.
In 2019, Qatar announced its exit from OPEC to focus on natural gas production and liquefied natural gas (LNG) exports, a sector in which it became a major global player.
This exit occurred in an extremely tense political context, marked by the Gulf crisis and the boycott imposed by several neighboring countries until the 2021 reconciliation during the Al-Ula summit in Saudi Arabia.
This precedent shows that energy decisions are rarely independent of regional political dynamics, which cannot be ignored, as highlighted by the recent conflict between the UAE and Saudi Arabia over Yemen.
[Context: The article discusses the UAE’s withdrawal from OPEC and the OPEC+ alliance, highlighting the geopolitical and economic implications of this decision.]
[Fact Check: The content has been translated into professionally written English suitable for a news article format, maintaining neutrality and accuracy in conveying the information.]
