UAE to Exit OPEC as Iran War Drives Oil Above US$111

In a statement carried by the state-run WAM news agency, the UAE said the departure reflects its “long-term strategic and economic vision” and its desire for greater flexibility as it accelerates investment in energy production. The country also confirmed it will exit the broader OPEC+ alliance, which includes Russia.

The move highlights growing fractures within the producer group, whose influence over global oil markets has weakened in recent years as US production surged above 13 million barrels per day.

Explaining the impact of the UAE's departure, Richard Tullis, natural resource analyst at Water Tower Research, noted in an email to the Investing News Network, “OPEC loses an important member that was producing pre-war 3 to 4 percent of global oil production and about 11 percent of OPEC production.”

Market observers have also pointed to rising tensions between the UAE and Saudi Arabia, OPEC’s dominant producer, over both economic strategy and regional politics.

“The UAE has reportedly commented on its disappointment that other OPEC members have not done more to help prevent damage to UAE during the war,” Tullis added.

To hear more from Tullis on the oil market and how investors should be positioning, listen to his March 24 podcast interview above.

The split could further complicate OPEC’s ability to manage prices and coordinate supply.

“The UAE's decision to leave OPEC next month allows the country to pursue its goal of significantly expanding its oil production without OPEC interference,” said Tullis.

“UAE had the capacity to produce an estimated 4 million to 4.25 million barrels per day in 2025, but was limited to producing about 3.5 million barrels per day for much of the year due to OPEC+ production quotas.”

He added, “The UAE has expressed a goal of reaching 5 million barrels per day production by 2027 and could potentially produce its low unit cost oil at an even higher level by the end of the decade if demand warrants it.”

Although the UAE's exit will be a blow to OPEC’s oil cartel status, the decision could offer some relief to consumers when the Strait of Hormuz reopens to international trade. As Tullis explained, “For energy investors, the UAE's move likely helps provide some oil price relief in the medium term, given the UAE's goal to significantly increase oil production over the next couple of years and assuming the ability to consistently export its oil."