For more than sixty years, the Organization of Petroleum Exporting Countries (OPEC) has served as a formal supply management agency for much of the world’s oil production (about 37 per cent in 2026). The United Arab Emirates, which exported almost $78 billion USD of petroleum in 2024, announced its departure citing national interest and diverging production policies. 

The departure of the cartel’s third-largest producer and the fourth-largest oil exporter in the world by value, is a structural signal that Canada — an economy dependent on the production of high-cost oil — should take very seriously. 

OPEC was founded in 1960 as an organization designed to keep global oil supply below what a fully competitive market would deliver. While it also gave member nations geopolitical leverage, its primary purpose has been to restrain outputs of member states, allowing oil producers to sustain prices above that of a free-market level. Without supply management in place, the price of oil would fall as this rent-capturing behaviour would be competed away. For fossil fuel-dependent economies like Canada, those elevated prices have underwritten wealth transfers from consumers worldwide to oil-producing regions. 

The UAE’s exit threatens that calculus. While the Gulf nation has grown its production capacity to 4.8 million barrels per day, OPEC’s supply management mandate capped its actual production at 3.2 million. With that constraint lifted, the UAE intends to increase production, targeting 5 million barrels per day within a year. 

This signals that the UAE is making a strategic bet on volume over price. OPEC membership represents a commitment........

© National Observer