Apr 30, 2026 12:23 pm IST

Opinion | UAE Can Now Easily Meet An Old American 'Demand'. But There's A Casualty: Saudi

For years, the US had been pressing the Gulf states over low oil prices. One country can make that possible now.

Deepanshu Mohan, Saksham Raj Deepanshu Mohan Columnist Saksham Raj Columnist

Deepanshu Mohan Columnist

Saksham Raj Columnist

The West Asian conflict has crossed the two-month mark, and the Strait of Hormuz, through which one-fifth of global crude oil and LNG transits, is still under a blockade. This makes any immediate increase in the UAE's exports practically impossible. So, what exactly is the intent behind the departure of the Arab country from the Organization of the Petroleum Exporting Countries, or, OPEC?

Given the blockade of Hormuz, leaving OPEC does not change the commercial reality for the UAE or any other interlinked nation. Paradoxically, however, it is this very limitation that renders the present moment perfect for crafting such an exit.

If the UAE had decided to walk out of OPEC under normal conditions, each of the following factors would have imposed significant costs - the cartel's price floor limit, the reliance on cartel discipline, the risk of Iran flooding the market as long as Saudi Arabia remained committed to its own discipline, and the fragile political fallout in the Gulf. But none of these charges is relevant anymore, thanks to the war and the choking of Hormuz. In any case, OPEC cartel discipline has been undermined severely by the conflict, what with Iran mounting massive assaults on Emirate shipping and infrastructure, as well as on its other Gulf neighbours.

Internal Contradictions

To understand the structural inevitability of such a shift in the UAE's trajectory, it is necessary to trace the decade-long saga between the UAE's production ambitions and the framework defined by OPEC's quota system.

Under a $150 billion investment programme for the period 2023-2027, Abu Dhabi's national oil company, ADNOC, plans to ramp up its production capacity from the current 4.85 million barrels per day (MB/d) to 5 MB/d, three years ahead of an earlier deadline of 2030. However, according to Energy Intelligence, OPEC's quota rules limited actual UAE output in January 2026 to just around 3.4 MB/d. That........

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