In a significant development shaking the global energy landscape, the United Arab Emirates has announced its withdrawal from both OPEC and the broader OPEC+ framework. This move removes a key player from one of the world’s most influential energy groups, raising questions about future stability and regional dynamics.

The Gulf nation, boasting a substantial capacity of approximately 4.8 million barrels per day and considerable potential for increased output, declared its departure on Tuesday, citing a focus on “national interests.” This decision unfolds against the backdrop of a historic energy shock, exacerbated by the ongoing US-Israel war on Iran, which continues to destabilize the region and global markets.

Understanding OPEC and its Historical Mission

The Organization of the Petroleum Exporting Countries (OPEC), a permanent intergovernmental body headquartered in Vienna, Austria, was established with the crucial objective of coordinating and unifying petroleum policies among its member states. Its genesis at the Baghdad Conference in September 1960, by founding members Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, marked a pivotal moment.

At that time, global oil markets were largely controlled by powerful Western oil companies, infamously known as the “Seven Sisters,” which dictated production and prices. OPEC’s broader aim was to reclaim sovereignty over natural resources for producing nations, ensuring fair and stable prices for their petroleum, while also guaranteeing regular supplies to consuming nations. This assertion of economic independence against external dominance remains a core principle.

OPEC currently comprises 12 members, including Algeria, Republic of the Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, and Venezuela. The UAE’s withdrawal, effective May 1, marks the departure of a member that had contributed to the organization since 1967, further challenging the collective’s unity.

The organization strives for price stability by setting agreed production quotas for its members, who collectively control about 30 percent of global supply. Since 2016, OPEC has expanded its influence through the OPEC+ framework, collaborating with non-OPEC producers like Russia, Azerbaijan, Kazakhstan, and others, boosting its collective output to approximately 41 percent of global supply.

Why the UAE’s Departure?

The UAE, alongside Saudi Arabia, possesses significant spare capacity, a crucial tool for OPEC to respond to supply shocks. However, nations with such capacity may prioritize individual financial gains by cashing out reserves rather than utilizing them for market stabilization, potentially undermining collective efforts.

Abu Dhabi’s increasingly assertive foreign policy has progressively distanced it from fellow OPEC members, particularly Saudi Arabia, with whom it holds differing views on key regional issues. Furthermore, the UAE has been actively cultivating its own sphere of influence across the Middle East and Africa, notably strengthening ties with the United States and Israel, formalized through the 2020 Abraham Accords. This alignment, viewed by some as a critical lever for regional influence and a direct channel to Washington, especially after recent regional tensions, raises questions about its commitment to the collective interests of OPEC and regional solidarity.

The UAE is not the first nation to exit OPEC. Indonesia, Qatar, Ecuador, Angola, and Gabon have also withdrawn in recent years, often due to disagreements over output quotas, highlighting the persistent challenges to maintaining unity within the organization amidst evolving national interests and external pressures.