UAE to exit OPEC, citing shift as Iran conflict disrupts oil markets

The United Arab Emirates will leave OPEC next month, its government said on Tuesday, ending decades of membership as it seeks greater flexibility to increase oil production during a period of geopolitical tension and market disruption linked to the Iran conflict.

The UAE, a member of the group since 1967 through Abu Dhabi, said the decision aligns with its long-term economic strategy and plans to expand energy investment. The move comes as oil markets face volatility and supply constraints, including disruptions to shipments through the Strait of Hormuz, a key transit route for global energy supplies.

“The U.A.E.’s decision to exit from OPEC reflects a policy-driven evolution aligned with long-term market fundamentals,” Energy Minister Suhail al-Mazrouei said in a social media post. “We thank OPEC and its member countries for decades of constructive cooperation.”

In a statement published by WAM, the government said leaving the group would provide greater “flexibility” and support its “long-term strategic and economic vision.” Officials added that constraints on shipping through the Strait of Hormuz mean the immediate market impact of the decision is likely to be limited.

The departure is expected to take effect on Friday and includes withdrawal from both OPEC and its wider alliance, OPEC+. The move reduces the group’s production capacity at a time when it has been managing supply to stabilise prices.

Before the current conflict, the UAE was producing about 3.6 million barrels of oil per day, accounting for roughly 12% of OPEC’s output, according to the International Energy Agency. Analysts say its exit could weaken the group’s ability to influence global markets over time.

Oil prices have risen sharply since the escalation of the Iran conflict, with Brent crude reaching as high as $119.50 a barrel. Prices were up 3.4%  on Tuesday at around $111.67.

The decision also highlights growing differences between the UAE and Saudi Arabia, OPEC’s leading member. The two countries have diverged on regional strategy and energy policy in recent years.

Tensions have intensified during the conflict with Iran. The UAE has faced repeated missile and drone attacks and has voiced dissatisfaction with the response from regional organisations. 

The UAE’s exit also aligns with broader criticism of OPEC from Donald Trump, who has accused the group of inflating oil prices and linked US security support for Gulf states to energy costs.

Despite leaving the group, UAE officials said the country would continue to increase production gradually, in line with demand and market conditions.