United Arab Emirates Quits OPEC and OPEC+ Effective May 1 Amid Strait of Hormuz Crisis

The United Arab Emirates announced it would withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ framework, with the UAE’s withdrawal effective on May 1, ending nearly 60 years of membership.

“The United Arab Emirates has announced its withdrawal from OPEC and the wider OPEC+ framework, removing a core pillar of one of the most influential groups in the energy world”

Al Jazeera

Al Jazeera said the UAE would quit “to focus on ‘national interests’,” and described the move as removing “a core pillar of one of the most influential groups in the energy world.”

Al Jazeera

CNN reported that the UAE plans to withdraw from OPEC on Friday, citing the UAE’s state news agency WAM, and said the decision also extends to OPEC+, “a larger group that consists of other oil producers such as Russia.”

AP said the UAE’s decision would strip the oil cartel of its “third-largest producer” and further weaken its leverage over global oil supplies and prices, while Reuters-style reporting in the BBC described the exit as “a blow to the cartel” that oversees oil production and influences global prices.

The BBC also said the UAE’s departure comes after nearly 60 years of membership and that the UAE said it would help it meet “growing global energy demand in the long term” after investments to boost production capacity.

In a statement carried by WAM, the UAE said the decision reflects “long-term strategic and economic vision” and “accelerated investment in domestic energy production,” and it said it would bring “additional production to market in a gradual and measured manner, aligned with demand and market conditions.”

Forbes added that the UAE made the announcement via WAM and cited “near-term volatility” in the market and a desire to ramp up investment in domestic energy production, while also tying the decision to the Iran war that began in February and choked oil transport through the Strait of Hormuz.

Multiple outlets tied the UAE’s decision to a review of its production policy and to the pressures created by the Iran war and the Strait of Hormuz, while also pointing to long-running disputes over quotas and internal OPEC dynamics.

DW quoted the UAE’s Ministry of Energy and Infrastructure saying the move, effective May 1, “reflects the emirates' long-term strategic and economic priorities,” and it said the UAE’s decision was based on “our national interest and our commitment to contributing effectively to meeting the market's pressing needs.”

AP News

DW added that the UAE said it would continue to act responsibly by bringing “additional production to market in a gradual and measured manner, aligned with demand and market conditions,” and it said “the time has come to focus our efforts on what our national interest dictates.”

Forbes said the UAE cited “near-term volatility” and a desire to ramp up investment in domestic energy production, and it described the statement as referring to the Iran war started by the U.S. and Israel in February that “has choked oil transport through the important Strait of Hormuz.”

AP said the UAE’s decision had been rumored and that it pushed back in recent years against OPEC production quotas it felt had been too low, meaning it wasn’t able to sell as much oil as it wanted, while the BBC said the UAE’s energy minister argued that being outside the group would give it more flexibility.

The BBC also reported that the UAE’s departure came as the World Bank warned the war in the Middle East has caused the biggest loss of oil supply on record, and it quoted the World Bank’s chief economist Indermit Gill saying, “The poorest people, who spend the highest share of their income on food and fuels, will be hit the hardest.”

CNBC and CNN both emphasized the Strait of Hormuz constraint, with CNBC saying the UAE’s exit is unlikely to affect the market in the next year “with the strait closed,” and CNN saying the implications for oil prices at the moment are limited because the Strait of Hormuz “still remains largely shut.”

Reactions to the UAE’s exit spanned political commentary from President Donald Trump, statements from UAE officials, and assessments from energy analysts about how the move could reshape OPEC’s ability to manage supply and prices.

“United Arab Emirates to quit oil cartel Opec The United Arab Emirates (UAE) is quitting the Opec and Opec+ groups of major oil producing nations next month after nearly 60 years of membership”

BBC

Forbes reported that President Donald Trump, in an exchange with reporters in the Oval Office, called the move “great” and said, “I think ultimately it’s a good thing for getting the price of gas down, getting oil down, getting everything down.”

CNBC quoted Jorge León, head of geopolitical analysis at Rystad Energy, saying the UAE’s “departure therefore removes one of the core pillars underpinning OPEC's ability to manage the market,” and it quoted David Goldwyn saying Riyadh will still have a significant ability to discipline the market but “it will have a weaker hand now that the UAE is no longer a member.”

The BBC quoted Saul Kavonic, head of energy research at MST Financial, describing the exit as “the beginning of the end” for the alliance, and it quoted Neil Atkinson, the International Energy Agency’s former head of the oil industry and markets division, saying it is “a major blow to the future effectiveness” of Opec.

AP included a direct statement from Emirati Energy Minister Suhail al-Mazrouei, who told CNBC, “We’ve been working together for years and years. We have the highest respect for the Saudis for leading OPEC,” while CNBC also quoted him saying the UAE’s exit was timed to limit disruption to fellow producers.

DW quoted Rystad’s Jorge Leon saying, “Alongside Saudi Arabia, it [the UAE] is one of the few members with meaningful spare capacity — the mechanism through which the group exerts market influence,” and it quoted ICIS director Ajay Parmar saying, “The UAE has been in disagreement with general OPEC policy for quite some time.”

CNN quoted Jorge Leon again, saying the UAE’s withdrawal “marks a significant shift for the oil-producer group,” and it included a statement from UAE Energy Minister Suhail Al Mazrouei casting the move as positioning the country as a leading producer while citing “what is happening to the Strait of Hormuz and the level of withdrawal of the strategic reserves.”

While the UAE’s decision is described across outlets as a major blow to OPEC, the coverage diverges on how immediate the market impact is and how much the exit changes OPEC’s long-term power.

The BBC framed the departure as “a blow to the cartel” and quoted analysts warning that OPEC’s ability to influence prices would be “clearly weakened” once normal production resumes after the war, while also noting that oil prices remained elevated with oil rising to $113 a barrel on Tuesday compared to around $73 before the war began.

CNBC

CNN emphasized that the move “means little for oil prices at the moment” because the war with Iran has forced producers across the Persian Gulf to slash production and because the Strait of Hormuz “still remains largely shut,” and it said oil prices were unchanged by the news with Brent up 2.6% to $111 a barrel at 11.30 a.m. ET.

In contrast, Forbes described the exit as potentially impacting OPEC’s ability to control supply and prices around the world, and it reported that Brent crude slipped slightly on Tuesday but then soared to a wartime high of $119.99 per barrel on Wednesday, while U.S. gasoline prices jumped to a national average of $4.23 a gallon.

DW described the withdrawal as dealing “a major blow” and said it threatens to weaken unity within OPEC, which “has often masked internal divisions over geopolitics and production quotas,” while also quoting Rystad’s Jorge Leon that the UAE’s spare capacity is “the mechanism through which the group exerts market influence.”

AP said no immediate impact is likely for world oil markets because supplies are sharply constrained by the war in Iran and the closure of the Strait of Hormuz, and it reported that on Tuesday Brent crude traded above $111 a barrel and that OPEC accounts for roughly 40% of the world’s oil output.

CNBC’s framing was more explicitly bearish for cohesion, saying the UAE’s exit could prove bearish for prices over the long term and quoting Goldwyn on “significant risk of higher oil price volatility,” while also quoting León that OPEC will become “structurally weaker.”

The outlets describe the stakes as both geopolitical and market-structural, with multiple analysts warning that OPEC’s ability to manage supply and stabilize prices could weaken, while also stressing that the Strait of Hormuz closure limits what can be shipped in the near term.

“The United Arab Emirates will leave OPEC, a decades-old cartel of the world’s top oil exporters, delivering a shock that will ripple through global oil markets at a time of unprecedented turmoil caused by the Iran war”

CNN

BBC said the UAE’s departure will not have an immediate impact on global energy supply because of the ongoing closure of the Strait of Hormuz, but it could lead to a longer-term boost in output, and it reported that the World Bank said energy prices will rise by about a quarter on average as a result this year and that it could take six months for shipping through the Strait of Hormuz to return to pre-war levels.

CNN

CNBC warned that the UAE’s exit could undermine the cohesion needed among producers to keep prices from falling too much during supply gluts, and it quoted Goldwyn saying, “There’s significant risk of higher oil price volatility as a result of this decision.”

DW said the withdrawal marks “a significant shift for OPEC” and quoted Rystad’s Jorge Leon that the UAE’s spare capacity is the mechanism through which the group exerts market influence, while it also quoted ICIS’s Ajay Parmar saying the UAE’s disagreement with OPEC policy has been ongoing and will have “a significant impact in the long term.”

AP said the UAE’s withdrawal removes one of OPEC’s few members with the ability to quickly increase production, quoting Jorge Leon that “A structurally weaker OPEC, with less spare capacity concentrated within the group, will find it increasingly difficult to calibrate supply and stabilize prices.”

Forbes added that leaving OPEC could impact the group’s ability to control supply and prices around the world, and it described the UAE as the third-largest OPEC oil producer behind Saudi Arabia and Iraq, while also stating that the UAE will leave OPEC+ as well.

CNN and the BBC both pointed to the possibility of future volatility once the Strait of Hormuz reopens, with CNN saying the implications would be bigger if the UAE’s decision triggers further disintegration, and with the BBC quoting David Oxley at Capital Economics that the UAE’s departure could lead to lower oil prices but higher volatility in the coming decades.