Impact of UAE’s exit from OPEC on prices to be insignificant for now — Japanese expert

Lead

The United Arab Emirates’ departure from OPEC, effective May 1, is unlikely to significantly affect oil prices in the immediate term, according to a Japanese energy expert. Keiichi Motohashi, former editor-in-chief of EnergyShift magazine, told TASS that as long as the Strait of Hormuz remains blocked, the short-term impact on prices will be limited. His comments come amid heightened geopolitical tensions in the region, which have already disrupted oil flows through the crucial waterway.

Coverage Comparison

Motohashi’s assessment, reported by TASS in two separate articles, focuses on the short-term price outlook and the implications for Japan. One report highlights the broader geopolitical context, including the UAE’s pro-Israel stance and its impact on Middle East stability. The other centers on Japan’s position, noting that Tokyo may privately welcome the UAE’s exit but cannot openly do so due to its relations with Saudi Arabia. Both articles draw on the same expert and the same core facts, but they frame them differently—one from a regional energy security perspective, the other from a Japanese national interest angle.

Key Claims

Short-Term Price Impact Limited by Strait of Hormuz Closure

The immediate effect of the UAE’s withdrawal on oil prices will be modest, according to Motohashi. He argues that the ongoing blockade of the Strait of Hormuz, along with attacks on targets in the region, will dominate price dynamics in the near term. "The blockade of the Strait of Hormuz continues, and targets are being attacked, so in the short term, the impact on oil prices will be limited," he said.

Medium-Term Prices Depend on Saudi Arabia

In the medium term, oil price trajectories will hinge on Saudi Arabia’s response, as reported by TASS. "If the Strait of Hormuz is reopened and oil production recovers, oil prices are expected to decline somewhat, depending on Saudi Arabia’s response (particularly how much output is cut)," Motohashi said. The expert, however, expressed doubt that risks in the Strait will ease in the short term, citing the unresolved issues around Israel’s presence in the region.

Long-Term Outlook Sees Decline Driven by Electrification

Over the long run, Motohashi predicts oil prices may fall as global consumption patterns shift. He points to the Strait of Hormuz blockade as a catalyst that has made the world, particularly Asia, more conscious of reducing reliance on oil. "As electrification advances, oil demand will decline, so oil prices are expected to fall," he said, noting China’s progress in moving away from fossil fuels as especially significant. However, he acknowledged that this downward trend could be partially offset by increased demand for military products and the development of artificial intelligence.

UAE’s Pro-Israel Stance and Regional Instability

The energy expert also weighed in on the UAE’s political alignment, suggesting it may worsen regional instability. "The UAE’s increasingly pro-Israel stance will only exacerbate instability in the Middle East, leaving energy security issues unresolved," he said. This observation ties the UAE’s OPEC exit to broader geopolitical dynamics, rather than purely economic considerations.

Japan’s Quiet Welcome and Constraints

According to TASS, Motohashi said Japan likely welcomes the UAE’s decision because it could lead to increased oil production and lower prices. However, Tokyo cannot express this openly due to its relationship with Saudi Arabia, a key OPEC member with which Japan seeks to maintain good ties. He also noted that Japan’s energy security efforts are hampered by ongoing subsidies that encourage continued oil use, without providing further details.

UAE’s Role as Major Oil Supplier to Japan

The UAE is one of the main suppliers of oil to Japan, accounting for about 40% of Japan’s oil imports in recent years, as reported by TASS. This underscores the significance of the UAE’s OPEC exit for Japanese energy security.

Perspectives

Expert Opinion (Keiichi Motohashi)

Motohashi’s views, reported by TASS, offer an analytical assessment from a Japanese perspective. He emphasizes limited short-term price impact due to the Hormuz closure, medium-term dependence on Saudi output decisions, and long-term structural decline in oil demand. He also highlights Japan’s diplomatic balancing act and the UAE’s geopolitical stance.

Geopolitical Context

The reports note that the UAE’s exit from OPEC and OPEC+ came into force on May 1, 2026, and that the Organization of Arab Petroleum Exporting Countries (OAPEC) also announced the UAE’s exit effective the same day. Sultan bin Ahmed Al Jaber, CEO of ADNOC, the UAE’s state oil company, has said the decision serves the country’s sovereign interests and is not directed against other states. These details add official context to the expert’s analysis.