Updated April 28, 2026 at 5:20 PM EDT
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The United Arab Emirates has announced that it's leaving OPEC, the cartel representing major state-owned oil producers, on May 1.
In an announcement posted on state-owned media, the UAE wrote that the decision "reflects the UAE's long-term strategic and economic vision and evolving energy profile."
The UAE has long been frustrated with its allotted quota for oil production as an OPEC member. The small nation is one of the largest oil producers in OPEC, but its spare capacity — the amount of oil it could produce but is not currently producing — is also unusually large. Leaving the cartel frees the UAE up to produce more of that oil — and make more money.
None of that would happen right away, since the near-closure of the Strait of Hormuz is putting a cap on the UAE's exports. But after the current crisis resolves, it could reshape oil markets.
The UAE "can increase production rapidly," says Jorge Leon, the head of geopolitical analysis at the research group Rystad Energy. "And they will just act as a normal non-OPEC producer … where they just pump as much as they can."
Nearly 60 years of membership
OPEC includes major state-owned oil producers like Saudi Arabia, Kuwait and Iran; the UAE joined the group nearly 60 years ago, just a few years after the cartel was established. As a group, OPEC members set their oil production levels in an attempt to balance oil markets and maintain oil prices high enough to support their national budgetary needs, but not so high that it hurts the economy and cuts into oil demand. (If every country produced as much oil as they possibly could, the rules of supply and demand would send crude oil prices down sharply and reduce their incomes.)
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In more recent years, through the broader OPEC+ alliance, countries like Mexico and Russia have also agreed to negotiate with OPEC on production levels. The United States, which does not have a state-owned oil producer, does not officially participate in OPEC talks, although some presidents have made requests of OPEC, and some U.S. oil executives have been accused of collusion with the cartel.
The UAE's departure from the group comes after years of friction. The UAE has chafed at its production caps, pushing to raise quotas and produce more oil, while Saudi Arabia, OPEC's largest producer and its dominant force, pushed back. The dispute sometimes prolonged or delayed OPEC meetings.
A fraying UAE-Saudi relationship
Meanwhile, political relations between Saudi Arabia and the UAE — once close allies — have grown sour for reasons beyond oil. The two countries have backed opposing forces in Yemen. They are also competing economically. The UAE had long been a hub for foreign investment and tourism; in the last decade Saudi Arabia started vying for more of those investments as part of its "Saudi Vision 2030" strategy. "When Saudi Arabia started trying to do those transformations," says Leon, "a lot of competition started between those two countries."
Then there's the Iran War. A former UAE government official, Tareq Alotaiba, recently wrote that the conflict has strengthened the UAE's ties with partners like the U.S., Europe and Israel, while its Arab neighbors have "hedged, equivocated and, in some cases, pressed for their own agendas even as states were under attack." Many countries around the Persian Gulf have been the focus of Iranian attacks since the war began; the UAE, which is located just across the Hormuz Strait from Iran, has been particularly targeted.
In the context of that political rift, the UAE's departure from the Saudi-led OPEC cartel may signal a realignment over something broader than just oil production.
Ahmed Helal of the advisory firm The Asia Group wrote, in a note emailed to NPR, that Saudi Arabia and the UAE are the Gulf's two biggest economies. He says the deteriorating relationship between them could affect cohesion across Arab states in the Gulf region more broadly, which "will have a lasting effect on regional security coordination and cross-border business."
Long-term implications for global markets
For now, the UAE — like other oil producers in the region — is limited in how much oil it can export because Iranian attacks and a U.S. blockade have strangled traffic through the Strait of Hormuz.
That means the news of its departure from OPEC will have essentially no near-term impact on oil supplies worldwide. Global crude oil prices, currently above $110, did not respond at all on Tuesday to the news, which in normal times would likely have caused a dramatic price reaction.
In the long-term, though, the departure of an important member of the cartel will weaken OPEC's ability to control the oil market. UAE produces significantly more oil than Qatar and Ecuador, the two most recent OPEC members to leave the alliance. (Qatar is a major producer of natural gas, however).
There are also questions about how other OPEC members respond. "If other countries decide to follow suit, there's certainly the potential for the OPEC structure to weaken," Gianna Bern, a professor at the University of Notre Dame's business school, tells NPR via email. Even if the rest of OPEC holds the course, it will be a less powerful and less nimble organization.
That's because right now, the UAE producing less than it could provides a "buffer" of readily available oil production, which — when the Strait of Hormuz is operating like normal — OPEC can use to help offset the impact of any sudden supply shocks.
So what does that mean for oil consumers? Well, putting more oil onto markets generally pushes prices down. But cutting into the world's "buffer" makes prices more likely to spike in a crisis.
Leon sums up the likely outcome for global oil markets in the medium- and long-term: "Probably lower oil prices, but also more volatile oil prices."
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