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As of December 31 last year, the UAE used to be the third-largest producer of oil in the OPEC group, following Saudi Arabia and Iraq.
The United Arab Emirates has announced that it will be leaving the Organization of Petroleum Exporting Countries (OPEC) and its alliance OPEC+ starting Friday, May 1, to meet changing demand and gradually ramp up production.
This marks an end to over six decades of Abu Dhabi's association with the cartel, which began in 1967 under the Emirate of Abu Dhabi and later formalized after the establishment of the United Arab Emirates in 1971.
How Significant Is The UAE?
As of December 31 last year, the UAE used to be the third-largest producer of oil in the OPEC group, following Saudi Arabia and Iraq.
The country had a production capacity of 4.85 million barrels per day as of early 2026, most of which is driven by the Abu Dhabi Oil Company (ADNOC).
However, production quotas under the OPEC means that production has usually been capped between 3 million to 3.5 million barrels per day, according to the Trade Administration, who also noted that ADNOC was planning on investing over $150 million to take the overall production capacity to 5 million barrels per day by 2027.
It is this production quota constraints that would go on to become one of the reasons behind UAE's exit.
Earlier Threats
Back in 2021, the UAE had engaged in a public disagreement with group leader Saudi Arabia over their production quota being disproportionately low compared to its actual capacity.
"We knew that the UAE position in that agreement was the worst in terms of comparing our current capacity with the level of production," UAE's then energy and infrastructure minister Suhail Al Mazrouei had told CNBC.
Eventually, they agreed to an output quota of 3.65 million barrels per day from April 2022, saying that "an agreement is an agreement."
In 2023, the Wall Street Journal had reported that the UAE was debating a formal withdrawal from the group as officials were unhappy with Saudi Arabia's decision on aggressive production cuts.
UAE officials believed that the OPEC constraints were unfairly limiting their exports and were not in congruence with their increasing production capacity.
The Road Ahead
The UAE believes that the shortages caused by the war will require agility to respond to market demands "without being constrained by the collective decision making process of the wider group," Mazrouei told Bloomberg in an interview.
The minister also went on to add that the decision was taken after a careful and long review of all their strategies and at the right time as it will not impact the market hugely considering its undersupplied status due to the Iran war.
(With Inputs From Agencies)
