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> Economy

Oil: What the UAE–OPEC “divorce” means for energy markets

The Reuters report gathers early reactions from analysts following the United Arab Emirates’ decision to leave OPEC and OPEC+, highlighting what it could mean for the future of the organization and global energy markets — including implications for the United States

Newsroom April 28 07:00

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The decision by the UAE is expected to send strong shockwaves through international energy markets, with analysts warning it could significantly weaken the organization and lead to a more volatile oil market in the coming years.

According to Reuters, the move is particularly critical for Saudi Arabia, which has long acted as the central stabilizing force within OPEC+, especially during periods of oil-market crises.

Jan von Gerich, chief market analyst at Nordea, said the UAE appears to be aiming for a substantial increase in oil production, which could put downward pressure on prices in the long term. He noted that after tensions with Iran subside, OPEC may no longer be able to influence oil prices as effectively as it once did.

Monica Malik, chief economist at ADCB, argued that the UAE’s exit could allow it to increase its global oil market share once geopolitical conditions stabilize. She added that this could ultimately benefit consumers and the global economy if it leads to higher oil supply.

Jorge Leon, energy analyst at Rystad Energy, described the UAE’s departure as a “major turning point” for OPEC. He noted that the UAE — alongside Saudi Arabia — was one of the few members with significant spare production capacity, which historically allowed OPEC to stabilize markets and balance supply fluctuations. However, he warned that while short-term impacts may be limited due to disruptions in exports through the Strait of Hormuz, the long-term effect could be a structural weakening of the organization.

Outside OPEC+, the UAE will have both the incentive and capacity to significantly increase production, raising questions about Saudi Arabia’s ability to remain the primary stabilizer of global oil markets.

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Ajay Parmar, Energy and Refining Director at ICIS, said the UAE had long disagreed with OPEC policy and that its exit is not surprising, though it will have major long-term consequences. He also suggested the move reflects a gradual weakening of the traditional alliance between the UAE and Saudi Arabia.

Sergey Vakulenko of the Carnegie Russia Eurasia Center and former Gazprom Neft executive said the UAE had long planned to increase oil output by up to 30%, something constrained by OPEC+ production limits. He added that the current timing may be relatively favorable for such an announcement, as oil prices remain high due to supply disruptions linked to tensions in the Strait of Hormuz.

He further noted that even after shipping routes normalize, demand is expected to remain strong as countries rebuild depleted energy reserves. Without the UAE, he said, OPEC will be significantly weaker, as neither Iran nor Iraq has meaningful spare production capacity — a role previously shared mainly by Saudi Arabia and the UAE.

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