Abu Dhabi [UAE], May 1 (ANI): The United Arab Emirates on Tuesday announced its withdrawal from OPEC and the OPEC+ groupings, a step analysts describe as a “watershed moment” that ends decades of economic deference to Saudi Arabia.
A strategic analysis by PSIFOS Consulting Group calls the move a “political rebellion” against Riyadh’s dominance of regional energy policy. The exit signals a shift in Emirati foreign and energy policy toward closer ties with the United States, Israel, and fast-growing Asian markets.
Tensions have long simmered within OPEC+ between the region’s two largest economies. The UAE favors a market-share strategy over price management, leveraging a more diversified economy and lower production costs to maximise sales volumes even at modestly lower prices. PSIFOS says the withdrawal “marks the formal conclusion of its economic deference to Saudi-led policies,” noting that the relationship has gone from alliance to “intense economic competition.”
A key driver is concern about “stranded assets”—hydrocarbon reserves that could lose value before extraction as global fossil fuel demand is projected to peak by mid-century. Abu Dhabi has invested more than USD 122 billion to raise production capacity to 5 million barrels per day (bpd) by 2030. Under OPEC quotas, Emirati output has historically been capped between about 2.6 million and 3.1 million bpd; leaving the cartel would allow the UAE to utilise its capacity and fund its transition toward green energy, including hydrogen and renewables.
Abu Dhabi also intends to promote its “Murban” crude as a global pricing benchmark to compete with Brent and WTI—an ambition that requires supply flexibility incompatible with OPEC’s quota system.
On Wednesday, US President Donald Trump welcomed the decision, saying it could help lower global oil and gas prices. “That’s a good thing for getting the price of gas down, getting oil down, getting everything down. They have it all. He’s a great leader, actually. I’m okay. They’re having some problems in OPEC,” he said, referring to UAE President Sheikh Mohammed bin Zayed Al Nahyan.
Analysts say the exit undermines the Arab-Russian consensus on oil pricing and weakens the bloc’s ability to “weaponise” energy supplies. The UAE is expected to bypass OPEC pricing mechanisms and pursue direct, preferential supply agreements with China and India—now the centre of gravity for global oil demand.
Regionally, the withdrawal leaves Saudi Arabia more isolated. The UAE previously acted as a moderating force against periodic overproduction with Russia; without Abu Dhabi, analysts warn Riyadh may resort to a “destabilising price war” to enforce discipline among remaining members. PSIFOS warns the move could fracture the Gulf Cooperation Council into competing blocs and “reshape the geopolitical architecture of Gulf energy relations” with long-term repercussions for regional politics, global markets, and alliances.
A separate ICICI Securities report noted the immediate impact might be limited by ongoing disruptions in the Strait of Hormuz amid conflict in West Asia, but that UAE spare capacity could enter global markets once logistical constraints ease. “We believe this move may help soften prices in the longer term, although volatility in the markets may spike owing to lower cohesive supply management from OPEC,” the report said. It also suggested the exit could prompt other OPEC members to reassess the benefits of membership amid declining revenues and geopolitical instability. (ANI)
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