The United Arab Emirates (UAE) has announced that it will leave the Organisation of the Petroleum Exporting Countries (OPEC) on May 1, ending nearly six decades of association with the oil cartel. Emirati officials have cast the move as part of a long-term recalibration of production policy, arguing that the country’s evolving energy profile and expanded output capacity no longer sit comfortably with OPEC’s quota discipline.
Despite appearances, this is not theatre for its own sake. It is the culmination of years of strain inside OPEC, where Abu Dhabi invested heavily in raising production capacity and then found itself constrained by output limits designed to defend prices rather than reward expansion.
The announcement comes as the Iran war has unsettled the Gulf and restricted movement through the Strait of Hormuz, the narrow artery through which roughly a fifth of traded oil and liquefied natural gas normally passes.
Nor is the move purely economic. The UAE is a regional business hub and one of Washington’s closest Arab partners. It has also been visibly frustrated with the Gulf response to Iranian attacks during the war, with Anwar Gargash, diplomatic adviser to the UAE president, saying the GCC supported one another logistically while its political and military response had been historically weak. That criticism matters. Abu Dhabi is signalling that it no longer wishes to subcontract its energy strategy, or its security anxieties, to an Arab consensus that it considers inadequate.
OPEC has survived exits before. Qatar left in 2019. Angola walked away in 2024. Yet the UAE is not a marginal player. It has been one of the group’s largest producers and a rare member with spare capacity, capital and geopolitical reach.
There is also a wider monetary shadow over this moment. The dollar still dominates global reserves, but its share has fallen to levels not seen in decades. Gulf states are not abandoning Washington, but they are watching a world in which security, liquidity and oil pricing are all being renegotiated under pressure. The UAE’s reported discussions with the United States over a possible dollar swap line should be read in that context: not as panic, but as insurance by a state that knows even wealthy economies need backstops when war reaches the sea lanes.
Writing closer to home, Islamabad cannot keep building budgets on hopes of cheap oil, deferred payments and friendly credit. A weaker cartel may eventually mean more supply, but in the near term, it could also mean sharper volatility, especially while Hormuz remains vulnerable. *