UAE to Exit OPEC and OPEC+ on May 1, Reshaping Oil Market Dynamics

UAE announces exit from OPEC next month

Move removes output constraints and opens path to independent policy

Blow to Saudi-led order appears unavoidable

The United Arab Emirates, a major Middle East oil producer, will leave OPEC and OPEC+ on May 1. The decision by a key producer to withdraw is set to send ripples through the global oil market.

The UAE government formally announced the decision on April 28 through state-run WAM. It said the move reflects the country's long-term strategy, economic vision and an evolving energy mix, including faster investment in domestic energy production. The government added that the decision would further strengthen the UAE's commitment to playing a responsible, reliable and forward-looking role in global energy markets.

The UAE's energy minister told Reuters that leaving OPEC and OPEC+ would free the country from production obligations imposed by the groups and give it greater flexibility. The minister added that the UAE had not held direct prior consultations on the withdrawal with any country, including Saudi Arabia.

OPEC and OPEC+ have coordinated member output quotas to stabilize international oil prices. The UAE's exit signals that it intends to set production based on its own judgment rather than remain bound by the current supply-cut framework.

That means UAE crude output could increase in the future. The government said it would continue to act responsibly after leaving the groups and would bring additional supply to the market gradually and cautiously in line with demand and market conditions.

With the UAE following Qatar, which left in 2019, the move is also poised to weaken the influence of OPEC, long led by Saudi Arabia.

According to OPEC data, the UAE produced about 3.4 million barrels a day before the war, the third-highest among the group's 12 members.

Shin Hyun-bo, Hankyung.com reporter greaterfool@hankyung.com