The United Arab Emirates' decision to leave OPEC, effective 1 May, has raised questions about the cartel's future, yet the oil market barely reacted, with Brent crude trading above $114 a barrel amid focus on Iran and the Strait of Hormuz.
While not the first member to depart — Angola quit in 2024, Ecuador in 2020, and Qatar in 2019 — the UAE is the most consequential, producing 4% of global oil but 12% of OPEC's output and 15% of quota-constrained supply. It was also one of the few members with spare capacity to adjust output.
This exit heaps pressure on Saudi Arabia, the only other member with both capacity and willingness to intervene if prices fall. The UAE, having diversified its economy, no longer needs to respect quotas, potentially undermining future OPEC production cuts.
The broader OPEC Plus alliance, formed in 2016 and including Russia, accounts for 59% of world production. However, the current war has sent prices soaring via Strait of Hormuz disruptions, reducing immediate pressure on the cartel. Most members were already near capacity before the conflict, so there is little cost to remain.
Whether OPEC becomes a 'busted flush' will only become clear when supply normalises and a glut emerges. Saudi Arabia retains market influence, but the UAE's newfound freedom to pump at will signals a significant shift in the cartel's dynamics.
