The United Arab Emirates has announced its departure from the Opec oil cartel after 60 years of membership, dealing a severe blow to the group and its de facto leader, Saudi Arabia. The exit comes as global energy markets face unprecedented supply disruptions due to the Middle East crisis.
The UAE, Opec's third-largest producer, stated that leaving the organisation would provide greater flexibility to respond to a 'new energy age' in line with its long-term strategic vision. The move is expected to weaken the cartel, which has historically coordinated oil production to influence global prices.
The decision marks a victory for US President Donald Trump, who has frequently accused Opec of 'ripping off the rest of the world' by inflating oil prices through output restrictions. Last week, Trump confirmed discussions with the UAE over a potential central bank currency swap arrangement should the regional crisis escalate.
The departure lays bare long-standing tensions between Abu Dhabi and Riyadh over Opec's production limits and geopolitical stance. Saudi Arabia has favoured curbs to support oil prices, while the UAE has grown frustrated with restrictions and plans to increase output to fund its low-carbon transition.
Analysts suggest the short-term impact on markets may be limited due to ongoing disruptions in the Strait of Hormuz, but the long-term implications point to a structurally weaker Opec. The UAE, with capacity of 4.8 million barrels per day, is well positioned to increase production independently.
