UAE Exit From OPEC Seen Adding Downward Pressure on Oil Prices

The United Arab Emirates' exit from OPEC could add downward pressure on oil prices over the medium to long term, analysts told CNBC.

CNBC reported on April 28, citing multiple experts, that the UAE's departure from OPEC this week would weaken the influence of both the producer group and its leading member, Saudi Arabia, in the oil market. Over time, that could lead to lower crude prices.

Jorge Leon, head of geopolitical analysis at Rystad Energy, said the UAE has been a key oil producer alongside Saudi Arabia, holding a substantial share of global spare capacity and playing an important role in managing market prices. Its exit would weaken the group's control over the market and reduce OPEC's structural influence.

John Kilduff, founding partner at Again Capital, said the move would undermine cohesion among producers when supply is abundant and prices come under pressure. That would make it harder to defend oil prices during periods of oversupply.

Still, the near-term impact on prices is likely to be limited. Geopolitical risks, including a possible closure of the Strait of Hormuz, continue to constrain supply and support crude prices, muting any immediate market reaction. Price moves after the announcement were also limited.

The UAE plans to pursue its own output growth strategy outside OPEC production limits. UAE Energy Minister Suhail Al Mazrouei has said the country is targeting production capacity of 5 million barrels a day by 2027.