The United Arab Emirates announced that it will leave the Organization of the Petroleum Exporting Countries on May 1, 2026. The UAE said its decision followed an extensive review of its production policy and future capacity, and cited geopolitical fluctuations affecting short-term oil supplies.

The UAE wrote in a statement carried by state-owned media: "Reflects the UAE's long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets."

The Emirate of Abu Dhabi joined OPEC in 1967, and the UAE remained in the bloc when the federation was formed in 1971. In recent years, the country's oil output was the third largest in OPEC, behind only Saudi Arabia and Iraq. The UAE pushed to raise its production quotas and produce more oil, while Saudi Arabia pushed back.

The UAE energy ministry said that reduced traffic through the Strait of Hormuz meant its exit from OPEC would not have a large effect on the market. The UAE is located just across the Strait of Hormuz from Iran, and Persian Gulf countries have been the focus of Iranian attacks since the war began, with the UAE particularly targeted. Reduced traffic through the strait limits how much oil the country can export.

"The UAE withdrawal marks a notable shift for Opec. Alongside Saudi Arabia, it is one of the few members with meaningful spare capacity – the mechanism through which the group exerts market influence," said Jorge Leon, head of geopolitical analysis at Rystad Energy.

Leon also addressed the implications for price management within the bloc. "OPEC and OPEC+ have only ever been as strong as the members' willingness to hold barrels back from the market, and the UAE was one of those. Saudi Arabia is now left doing more of the heavy lifting on price stability, and the market loses one of the few shock absorbers it had left," he said.

Brent crude oil prices rose 3.4% to $111.67 per barrel on Tuesday, and have reached as high as $119.50 per barrel since the outbreak of the war in Iran. U.S. West Texas Intermediate crude rose to nearly $102 per barrel in early trading, while international benchmark Brent rose to nearly $113 per barrel.