UAE exit from OPEC may push oil prices higher in medium term — expert

Lead

The United Arab Emirates (UAE) has decided to leave OPEC and OPEC+ starting May 1, 2026, a move that experts say marks a significant shift in the global energy landscape. The announcement, reported by the Emirati state news agency WAM, comes amid the Middle East crisis and has prompted varied analyses of its potential impact on oil prices and market stability.

Coverage Comparison

Multiple experts interviewed by TASS offered differing perspectives on the implications of the UAE's exit. Some see it as a catalyst for higher oil prices in the medium term, while others suggest it could increase supply flexibility and eventually lower prices. There is broad agreement that the decision reflects the UAE's long-term economic strategy, as stated by WAM.

Key Claims

• The UAE's withdrawal from OPEC and OPEC+ starts May 1, 2026, according to WAM.
• The decision is in line with the UAE's long-term economic strategy, per WAM.
• Marat Zembatov, director of the Center for Interdisciplinary Research at the Higher School of Economics' Institute of Public Administration, told TASS that the exit could "paradoxically push oil prices higher in the medium term" because the stability of international structures is associated with market stability, and the decision of a major player to exit psychologically calls both into question.
• Ambassador Ajai Malhotra, Distinguished Fellow at TERI and former Indian Ambassador to Russia, said the UAE's exit signals "a slow shift from cartel-based coordination and discipline towards more decentralized, market-driven, bilateral arrangements."
• Indian experts, including Sourav Mitra of Grant Thornton Bharat and Yogesh Jambhale of Rubix Data Sciences, said the exit could increase global oil supply flexibility, potentially lower prices, and allow India to negotiate long-term supply agreements without OPEC quotas.
• Kazakh oil expert Olzhas Baidildinov described the exit as "the beginning of a price war," predicting prices could return to $60-$70 per barrel once the Middle East situation stabilizes. He also noted the UAE plans to increase production to 5 million barrels per day by 2027.
• Nikolai Novik, expert at the Institute of World Military Economy and Strategy at the Higher School of Economics, said the UAE's departure, accounting for more than 12% of OPEC's output, undermines OPEC's coordination ability and could increase price volatility.
• The US Department of Energy's Energy Information Administration (EIA) revised its forecast for OPEC's spare capacity in 2027 to 2.5 million barrels per day, down from 3.8 million bpd, citing the UAE's withdrawal.
• According to TASS calculations based on OPEC data, the UAE accounted for 11% of OPEC oil production in 2024 and 7.3% of OPEC+ output.

Perspectives

UAE Government (via WAM): The decision to withdraw is in line with the country's long-term economic strategy, and the UAE remains committed to stabilizing the global fuel market, with its production policy to consider global supply and demand.

Russian Expert Marat Zembatov: The exit could push prices higher in the medium term due to the psychological impact on market stability, while acknowledging the UAE's official rationale of revising production policy and investing domestically.

Indian Experts: The exit is likely to increase global oil supply flexibility, potentially lowering prices and benefiting India's import bill and energy security.

Kazakh Oil Expert Olaz Baidildinov: The exit marks the start of a price war, with the UAE seeking to expand production and revenue from its substantial reserves.

Academic Nikolai Novik: The exit intensifies fragmentation trends, increases the risk of price volatility, and strengthens the role of alternative exporters like the US.

US Department of Energy: Lower OPEC spare capacity in 2027 reflects the UAE's withdrawal, potentially reducing the buffer against supply disruptions.

Russian Expert Alexey Belogoryev: The exit signals additional production growth in the Persian Gulf from 2027, likely increasing downward pressure on prices once the Strait of Hormuz is reopened.