UAE Quits OPEC, Accelerates Oil Projects Worth $55 Billion by 2028
The United Arab Emirates' decision to leave the Organisation of the Petroleum Exporting Countries (OPEC) is widely perceived as a substantial setback for the organisation. One analyst has described the move as "the beginning of the end of OPEC", a sentiment echoed by others predicting a diminished capacity for the cartel to dictate prices.
OPEC, formed in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, aimed to coordinate oil production among its members to ensure stable revenues. Over time, its membership has fluctuated, and in 2016, it formed the wider OPEC+ alliance with ten other producers, including Russia, to bolster its market influence during periods of low prices.
Historically, OPEC has attempted to manage global oil prices by adjusting supply. Notably, in October 1973, Arab oil producers initiated an embargo and production cuts targeting countries, including the US, that supported Israel during the Yom Kippur war. This action more than doubled oil prices and led to fuel rationing, exacerbated by the 1979 Iranian Revolution.
More recently, OPEC+ implemented drastic production cuts during the coronavirus pandemic to prop up prices. However, its response to surging oil prices following Russia's 2022 invasion of Ukraine was more equivocal, with an initial pledge for a slight increase followed by subsequent cuts.
Critics, including former US President Donald Trump, contend that OPEC has historically manipulated supply to maintain higher prices. Maurizio Carulli, a global energy analyst at Quilter Cheviot, notes that OPEC's effectiveness has varied, often undermined by individual members exceeding production quotas to gain market share, or facing technical limitations.
The UAE was OPEC's fourth-largest producer, pumping 3.1 million barrels per day in 2025. Experts suggest that outside the cartel, the UAE could increase production by approximately one million barrels daily. This aligns with Adnoc's announcement of $55 billion in accelerated growth projects between 2026 and 2028.
OPEC's overall influence on global oil markets has waned since the 1970s, now commanding a smaller share of internationally traded oil. In 2025, OPEC produced 36.7% of global crude oil, down from 52.5% in 1973. Non-OPEC producers such as the US, Canada, and Brazil have absorbed much of this diminished share. The US, for instance, has been the leading oil-producing nation since 2018.
Currently, the ongoing conflict and effective closure of the Strait of Hormuz, a critical transit point for a fifth of global oil supplies, has significantly impacted oil exports. While this blockage persists, Carulli suggests the UAE's departure will have "zero" short-term impact on exports, as movement is already constrained. OPEC+'s recent decision to increase production by 188,000 barrels per day from June, made without mentioning the UAE, is largely symbolic under these conditions.
Charles-Henry Monchau, CIO of Swiss private bank Syz Group, asserts that the UAE's exit marks the "end of OPEC as we knew it," highlighting that the cartel has not previously endured the loss of a major, founding-era producer. He concludes that OPEC will continue, but with "materially less ability to set prices."
