OPINION: The United Arab Emirates goes its own way
Dr. James E. Sulton Jr.
JA International Correspondent
Most people think of the Organization of Petroleum Exporting Countries or OPEC as the Middle East cartel controlling the price of oil. Baby boomers can remember waiting in long lines at gas stations to buy fuel during the early 1970s while having the feeling some invisible foreigners had taken charge of their daily lives. President Jimmy Carter saw his popularity suddenly crater as Persian Gulf kingdoms and the U.S.A. appeared to teeter on the brink of war.
American understanding today about OPEC is still only partly accurate and omits more than it reveals. OPEC is indeed a cartel of major oil exporting countries that tries to influence oil prices, but it is not purely Middle Eastern, and it does not “control” prices in a strict, all powerful sense.
OPEC is an intergovernmental organization founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Its members have traditionally included states in the Middle East, Africa, and South America, such as Saudi Arabia, Iran, Iraq, the United Arab Emirates, Algeria, Nigeria, and Venezuela. So, while several of its key members are in the Persian Gulf region, a large share of OPEC countries is outside the Middle East (OPEC+). OPEC+ members coordinate their petroleum policies and set production targets (quotas) with the aim of stabilizing markets and securing fair and stable prices and revenues.
Because OPEC collectively produces roughly 35–40% of the world’s crude oil and accounts for about half to 60% of internationally traded oil, changes in its output can strongly influence global prices. When demand weakens, OPEC often announces production cuts to support prices; when markets are very tight and prices spike, it may raise output to cool them somewhat. Simply put, OPEC sets the benchmarks for oil production, and its members reap a sizable share of worldwide profits from the sale of oil.
Thus, it came as something of a seismic shock, on April 28, 2026, when the United Arab Emirates (UAE) announced the immediate withdrawal of its membership in OPEC. The UAE’s decision to leave OPEC reflects long simmering tensions over production quotas, shifting relations with Saudi Arabia, and the pressures of war with Iran. Its exit opens the way for a national strategy that combines higher oil production with aggressive investment in clean energy and global economic integration. As those of us in the rest of the world catch our collective breath from this bombshell proclamation the reasons behind it come more clearly into focus.
Under OPEC rules, the UAE was restricted to producing roughly 3–3.5 million barrels of oil per day despite having invested heavily to raise its production capacity. Abu Dhabi (capital of the UAE) argued these quotas forced it to leave money on the table and bear disproportionate revenue losses compared with members with less spare capacity. So, there is a strong desire to monetize the nation’s new capacity and act independently. The UAE has built capacity close to 4.8–5 million barrels per day and wants to ramp up toward about 5 million barrels per day by next year. Leaving OPEC removes the UAE from coordinated supply cuts and lets it decide its own output at the right time and at the right pace based on its in-house reading of market conditions.
Also, no one should forget the UAE has diverging interests from Saudi Arabia and maintains an international rivalry with its famous neighbor. Some analysts emphasize that the decision to withdraw from OPEC was a long time coming as Abu Dhabi’s national interests increasingly diverged from other OPEC and OPEC+ members, particularly Saudi Arabia.
Other tensions arose over quotas and broader disagreements. Regional issues such as continuous strife in Yemen contributed to a strained relationship with Riyadh (Saudi Arabia’s capital). Then, there was the impact of the U.S.-Israeli war with Iran and the international oil transportation crisis. The exit from OPEC came amid a war involving Iran and the effective closure or severe disruption of the Strait of Hormuz, which pushed up oil prices and destabilized markets. In this environment, the UAE saw an opportunity and a need to maximize its energy revenues quickly and respond flexibly to market volatility rather than be bound by collective decisions.
The UAE’s break with OPEC was less a sudden rupture than the culmination of years of frustration with a quota system that, from its perspective, penalized investment and constrained its ability to sell oil it had already paid to develop. By limiting UAE production to roughly 3–3.5 million barrels per day even as national capacity neared 5 million, OPEC’s rules effectively forced the UAE to shoulder outsized revenue losses, especially during periods of high prices and geopolitical tension. In the context of a widening strategic rivalry with Saudi Arabia and a regional crisis centered on Iran and the Strait of Hormuz, UAE leaders concluded their national interests no longer aligned with those of the cartel.
