Abu Dhabi, May 1 (ANI): The United Arab Emirates announced on Tuesday that it is withdrawing from OPEC and the broader OPEC+ framework, a decision analysts call a watershed moment that ends decades of economic deference to Saudi leadership in regional energy policy.
A strategic note from PSIFOS Consulting Group describes the move as a “political rebellion” against Riyadh’s dominance, saying the exit signals an Emirati pivot in foreign and energy policy toward closer ties with the United States, Israel and rapidly expanding Asian markets.
Tensions within OPEC+ between the Gulf’s two largest economies have been growing for years. The UAE has favoured a market-share approach rather than the cartel’s traditional price-management strategy, leveraging a more diversified economy and lower production costs to prioritise volumes even at lower margins. PSIFOS says the departure “marks the formal conclusion of its economic deference to Saudi-led policies,” and characterises relations between Abu Dhabi and Riyadh as shifting from alliance to intense economic competition.
A central motivation for Abu Dhabi is the risk of “stranded assets”—hydrocarbon reserves that could lose value if global fossil fuel demand peaks mid-century. The UAE has invested more than USD 122 billion to expand capacity to 5 million barrels per day (bpd) by 2030. Under OPEC quotas, Emirati production has typically been limited to roughly 2.6–3.1 million bpd; leaving the cartel would allow the UAE to deploy its full capacity and use oil revenues to accelerate its energy transition into hydrogen and renewables.
Abu Dhabi also intends to promote its Murban crude as an alternative global pricing benchmark to compete with Brent and WTI. That strategy requires the supply flexibility that OPEC’s quota system constrains.
On Wednesday, US President Donald Trump welcomed the UAE’s decision, saying it could help bring down global oil and gasoline prices. “That’s a good thing for getting the price of gas down, getting oil down, getting everything down. They have it all,” he said, praising UAE President Sheikh Mohammed bin Zayed Al Nahyan.
Observers say the exit undermines the Arab-Russian oil consensus and weakens the remaining bloc’s ability to coordinate pricing or to “weaponise” energy supplies. The UAE is expected to pursue direct, preferential supply deals with China and India—the current centres of gravity for global oil demand—bypassing OPEC pricing mechanics.
Regionally, analysts warn the decision leaves Saudi Arabia more isolated. Abu Dhabi had at times acted as a moderating influence within the cartel; without it, Riyadh might respond with aggressive production tactics to maintain market discipline. PSIFOS cautions the move could fracture the Gulf Cooperation Council into competing blocs and “reshape the geopolitical architecture of Gulf energy relations,” with long-term consequences for regional politics, markets and alliances.
A separate report from ICICI Securities said the immediate market impact may be muted by ongoing disruptions in the Strait of Hormuz linked to conflict in West Asia, but noted 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 may spike due to less cohesive supply management from OPEC,” the report said. It added that the departure could prompt other OPEC members to reassess the costs and benefits of membership amid shrinking revenues and geopolitical uncertainty.
(Report sourced from a syndicated feed and published as received; the Tribune assumes no responsibility for its accuracy or completeness.)
