Emiratis’ exit from OPEC will boost the flow of oil after the war

April 29, 2026 — 12:08pm

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The United Arab Emirates’ defection from OPEC will change the nature of the post-war oil market, further weakening the cartel’s already-waning influence over the oil price.

While the timing of UAE’s exit from the oil cartel in the middle of the Iran war might have been a surprise, the departure has long been mooted as it became obvious that the country was increasingly frustrated by OPEC’s restrictions on its production.

Recent frictions between the UAE and the other regional power and the most powerful voice in OPEC, Saudi Arabia, over conflicts in Yemen, Sudan and Libya and how the war in Iran should be settled have added to the tensions between Abu Dhabi and Riyadh.

At the heart of the decision is a purely economic motivation. The UAE has invested heavily over the past decade or so in increasing its production capacity, which is currently about 4.85 million barrels of oil a day, with a target of 5 million barrels a day by next year and the potential to produce a lot more.

The Saudi-led OPEC , however, has imposed quotas on its members in an attempt to put a floor under global prices. The UAE production cap is 3.447 million barrels a day, although it had been breaching that cap and producing oil at a rate of about 3.6 million barrels a day before the war erupted.

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That gap between what it has been told to produce and what it could produce of more than a million barrels a day means that the UAE’s spare capacity lags only the Saudis’ 1.6 million barrels a day of underutilised capacity. As a proportion of its available capacity, however, the UAE’s is the largest of any OPEC member.

The UAE economy is more diversified and........

© The Age