(Source: Phoenix TV 2026-05-06)
The UAE officially withdrew from OPEC, causing a public break with the core Gulf organization that has been established for more than 60 years and has a decisive influence on global oil prices. OPEC once allowed its core members to get rid of European and American control and achieve a win-win situation as a team. But why did the United Arab Emirates suddenly overturn the table? Is it to make an extra $50 billion a year or does it have a deeper meaning? How are the global market, the Gulf structure, and the game of great powers affected by it?
Frozen production capacity, less earnings of US$50 billion per year
On May 1, 2026, the United Arab Emirates, a country that has been a member of OPEC for nearly 60 years, officially announced its withdrawal from OPEC and the "OPEC+" oil energy mechanism. The UAE government stated that this decision was made after a comprehensive assessment of the country's oil production policy and current and future production capacity, based on national interests, and aims to more effectively meet the urgent needs of the international market.
As the fourth largest oil producer in OPEC, the United Arab Emirates’ “withdrawal” this time is due to economic considerations of breaking through quota constraints and increasing production, as well as political motivations for deepening differences and intensifying games with Saudi Arabia, as well as the realistic stimulation of the US-Israel war. The UAE's move caused huge waves in the global energy market. This is a long-awaited break, not an impulsive one.
The dispute over quotas is the core of the conflict between the UAE and OPEC. After years of investments worth tens of billions of dollars, the Abu Dhabi National Oil Company in the United Arab Emirates has increased its actual sustainable production capacity to approximately 4.85 million barrels per day. However, according to OPEC’s latest production quota plan in May 2026, the UAE’s daily oil production quota is only 3.447 million barrels. This means that more than 1.4 million barrels of potential production capacity per day are frozen by the OPEC quota mechanism. If production capacity can be released freely, the UAE's annual revenue could increase by more than US$50 billion. This huge "locked" wealth has become the most direct motivation for the UAE to break away from the shackles of quotas.
Dong Xiucheng, Executive Dean of the China International Carbon Neutral Economic Research Institute, w88 casinosaid that the UAE has actively promoted economic transformation in the past 10 years, focusing on finance, tourism, new energy and other fields, which requires a large amount of financial support, which is different from its traditional structure of oil and gas. However, due to the production restrictions of OPEC and "OPEC+", there is a large amount of idle production capacity that cannot be realized, and naturally it is unwilling to accept this restriction.
In recent years, the UAE has successively spent more than 150 billion U.S. dollars to expand its oil fields. The total cost exceeds 150 billion U.S. dollars, and it plans to exceed 5 million barrels of daily production in 2027. However, according to OPEC restrictions, about 30% of its production capacity has been frozen. Coupled with the impact of the U.S. shale oil revolution and the accelerating replacement of fossil energy by renewable energy, the UAE is clearly aware that the time window for oil value is narrowing, and realizing it as soon as possible and accelerating transformation have become the most realistic options.
The rules led by Saudi Arabia are unfair, and the alliance has already been riddled with cracks
Why does OPEC formulate rules that are so unfavorable to the UAE? Because Saudi Arabia is the country that holds the steering wheel of the organization. It is both the founder of OPEC and its long-term actual controller. Since the establishment of OPEC in 1960, Saudi Arabia has always been the world's largest oil exporter and the largest idle production capacity, playing the role of "mobile regulator". All OPEC production quota rules essentially serve Saudi Arabia's strategic logic, maintaining high oil prices, protecting its own market share, and supporting the transformation of Saudi Arabia's "Vision 2030". In fact, Saudi Arabia uses OPEC's "lock" to block the efforts of countries such as the United Arab Emirates to expand production capacity in order to maintain its market share and pricing power.
Dong Xiuchengsaid that Saudi Arabia has the strongest position and the largest say in OPEC, and the dominance of quota allocation is in the hands of Saudi Arabia. There are long-term conflicts in the production reduction game, and the differences between the UAE and Saudi Arabia continue to increase.
In addition, changes in the security landscape in the Middle East have further pushed the UAE to reassess the value of OPEC. After the outbreak of the US-Israeli war, the UAE became the main target of Iran's retaliatory actions and suffered a large number of missile and drone attacks. Since February 28, the UAE has intercepted a total of 549 ballistic missiles, 29 cruise missiles and 2,260 drones launched by Iran. Middle Eastern countries such as the United States and Saudi Arabia have little military, economic, and political support for the UAE, which is one of the reasons why Abu Dhabi chose to leave.
Dong Manyuan, a researcher at the China Institute of International Studies, believes that countries such as the United Arab Emirates mainly bundle security with US protection, but this conflict proves that security protection has not been effectively implemented. However, the core of the UAE's withdrawal is still development and economic considerations, and security factors are not the main reason.
The UAE is also dissatisfied with Russia's pro-Iran stance within the "OPEC+" mechanism. However, Dong Manyuan pointed out that Russia's approach to Iran may cause dissatisfaction in the UAE, but it is not the fundamental motivation for withdrawal. The UAE's core demand is still to break free from production capacity constraints.
Key chips: Hormuz bottleneck and Fujairah pipeline
At present, the economic pressure brought by Iran and the United States' blockade of Hormuz has put all Gulf countries, and the United Arab Emirates also holds a key bargaining chip. The more than 400 kilometers of crude oil pipelines from its Habshan Oilfield to the Port of Fujairah can bypass the Strait of Hormuz and transport more than 1.5 million barrels of oil per day, reducing the export risks caused by the blockade of the strait to a certain extent. However, Dong Manyuan said that this pipeline can only meet part of the UAE's export needs and cannot solve the problem of exporting most of its production capacity. The fundamental solutions for the future are to build additional pipelines and wait for the Strait of Hormuz to resume free navigation before fully releasing production capacity.
Historical Review
OPEC has gone from "power-grabbing alliance" to "on the verge of splitting"
In 1960, in order to get rid of the monopoly squeeze of the Western "Seven Sisters of Oil", the five countries of Saudi Arabia, Iran, Iraq, Kuwait, and Venezuela established OPEC to regain the power of oil pricing and safeguard the common interests of oil-producing countries.
However, in the following more than ten years, internal divisions, Western obstruction, and technological backwardness made it difficult for this young organization to make a difference. It was not until the Fourth Middle East War in 1973 that OPEC imposed an oil embargo on the West and significantly raised oil prices. The first oil crisis broke out and the West fell into long-term stagflation. Arab oil-producing countries experienced explosive growth in wealth, and OPEC truly became a global "oil empire." Dong Manyuan added that the United States formally reached an agreement with Saudi Arabia on the exchange of petrodollar interests in June 1974. Saudi Arabia then relied on the security protection of the United States to become bigger and stronger within OPEC, which in turn affected the unified pace of the entire OPEC's oil policy, thus achieving the collective development of their Organization of the Petroleum Exporting Countries.
In 1967, before the United Arab Emirates was established as a nation, Abu Dhabi took the lead in joining the organization alone and became the sixth member. After the founding of the People's Republic of China in 1971, it inherited its membership until its withdrawal in 2026, and at the same time withdrew from "OPEC+". Prior to this, Qatar withdrew from OPEC in 2019, and Angola withdrew from "OPEC+" in 2024. This once monolithic oil alliance has already been riddled with cracks.
Dong XiuchengTo put it bluntly, the UAE accounts for about 11%-12% in OPEC and 7%-8% in "OPEC+", so its position is relatively important. To withdraw from OPEC, we must withdraw from "OPEC+" simultaneously, because both are dominated by Saudi Arabia and Russia, and the quota constraints are logically consistent. It makes no sense to withdraw from only one of them.
Reactions of the market and major powers: The United States is delighted, Saudi Arabia is hit hard
As soon as the news of the UAE's withdrawal came out, international oil prices fluctuated violently. Brent and WTI crude oil futures fell first and then rebounded sharply. On April 29, the price of Brent crude oil futures rose by more than 6% from the previous trading day, and the price of WTI crude oil futures closed at US$106.88 per barrel, an increase of 6.95%. Regarding this matter, US President Trump’s statement is thought-provoking.
Dong Xiuchengstated that successive U.S. governments have been extremely dissatisfied with OPEC, including "OPEC+", for artificially intervening in the market. The United Arab Emirates has withdrawn. The United States is happy to see this happen, and even hopes that other countries will follow suit, which will eventually lead to the disintegration of OPEC.
For Saudi Arabia, the UAE’s withdrawal is undoubtedly a major blow. As the "leader" of OPEC, the departure of the UAE will take away nearly half of its idle production capacity, significantly weakening OPEC's ability to regulate oil prices, and opening a "Pandora's box" for other member states to follow suit and withdraw from the group.
Dong Xiuchengbelieves that the UAE’s withdrawal from the group will significantly weaken Saudi Arabia’s leading role and the overall strength of OPEC, and also reduce the market share of “OPEC+”. Saudi Arabia and Russia are most worried that other countries will follow suit and withdraw, causing the entire system to collapse. But as long as Saudi Arabia and Russia continue to cooperate, OPEC and the "OPEC+" mechanism will not completely collapse.
On May 3, after the United Arab Emirates withdrew, "OPEC+" responded quickly. Seven countries including Saudi Arabia and Russia announced an average daily increase in crude oil production of 188,000 barrels in June and reiterated their commitment to stabilizing the market.
Dong Manyuan believes that the scale of this production increase is minimal and has almost no impact on global oil supply and demand. It is more of a political statement and a signal that the alliance is still operating.
As the fourth largest oil producer in OPEC, the UAE’s “withdrawal” move has added more uncertainty to the already fragile and imbalanced global energy market. For major oil importing countries such as China, the UAE's "withdrawal" will provide more choices and opportunities. After all, more supply sources and more market-oriented oil prices will help ensure China's energy security and reduce energy import costs. At the same time, cooperation between the UAE and China in the energy field will become more flexible and in-depth.
Dong Manyuan said that China and the UAE are a comprehensive strategic partnership. The UAE's withdrawal and release of production capacity will help China achieve multi-channel security of energy supply, while lowering global oil prices and inflationary pressures, and reducing domestic industry development costs, which is beneficial to both parties.
For OPEC, the UAE's turning away is no longer as simple as losing a member state. The authority of the 60-year-old oil alliance has been broken, production constraints are no longer absolutely effective, and the demonstration effect of withdrawing from the group has appeared. The global oil market is moving from the OPEC-led price control era to a new stage that is more diverse and uncertain. When energy transformation, regional competition, and the interests of major powers intersect and collide, the once-powerful oil empire is heading towards an unprecedented crossroads.
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