Widely seen as a major win for the Trump administration, which has sought to loosen the grip of the 12-nation Organization of the Petroleum Exporting Countries (OPEC), the United Arab Emirates (UAE) has opted to exit the alliance. The Middle Eastern nation has been a member of the cartel since 1967.
Exiting OPEC Alliance
Announcing the decision, the UAE Ministry of Energy and Infrastructure said the country has decided to leave OPEC and OPEC+, effective May 1. “This decision aligns with the United Arab Emirates' long-term strategic and economic vision and the evolution of its energy sector, including accelerating investment in domestic energy production, while reinforcing its commitment to its role as a responsible and reliable producer looking ahead to the future of global energy markets,” it said.
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The ministry said UAE has invested to meet demand changes efficiently and responsibly, prioritizing supply stability, cost, and sustainability, and as a standalone entity, it would be able to help stabilize the global energy system.
The decision to exit was characterized as a “policy-driven evolution aligned with long-term market fundamentals,” UAE said.
The move has been precipitated by the oil supply shock stemming from the U.S.-Iran conflict, which has essentially shuttered the Strait Hormuz, a major chokepoint in the Persian Gulf through which a quarter of the global crude and natural gas flows. Since the intensification of the conflict in late February, both West Texas Instrument (WTI) and Brent crude futures had touched nearly $120 a barrel.
The OPEC, and the extended OPEC+ alliance, comprising 12 OPEC members and eight non-OPEC members, account for roughly 41%-59% of global oil production, and therefore has a dominant control over the oil market.
A Long-Standing Trump Grievance Pays Off
Trump has had a confrontational posture toward OPEC, linking the U.S. military support for the Gulf with oil prices, saying that while the U.S. defends OPEC members, they "exploit this by imposing high oil prices."
The U.S. president has also publicly challenging Gulf allies to take more responsibility for their own security. Trump expressed his frustration toward allies that have been unwilling to help the U.S. reopen the Iran-controlled Strait of Hormuz by force, telling countries upset by high fuel prices to "go get your own oil," and warning that "you'll have to start learning how to fight for yourself, the USA won't be there to help you anymore."
That hard-edged message, combined with U.S. military operations against Iran, appears to have reshaped Abu Dhabi's strategic calculus.
Why This Matters for US Consumers
The UAE's exit could translate into real relief at the pump. The news did not lead to a significant change in the oil price, which has spiked since the start of the war in Iran. Many analysts expect the UAE's decision to leave OPEC to lead to a reduction in prices because it will increase global supply.
The UAE's production capacity, defined as the maximum sustainable rate at which a country can maintain crude output over a period of time, is currently 4.85 million bpd. As part of the OPEC+ supergroup, the UAE has been producing close to 30 percent below its current production capacity.
The Negative Offshoots
A flood of UAE barrels, however, could pressure margins for U.S. drillers, potentially delaying investments. There's also the near-term reality that war, not market structure, is currently driving the price tape. The price of oil climbed above $110 a barrel for the first time in three weeks on Tuesday.
Until the Strait of Hormuz is fully reopened, additional UAE supply will struggle to reach world markets at scale.
