The UAE’s decision to leave OPEC+ and what it means for global oil markets: Expert Insights from Saxo Bank and Elevate Financial Services

Ahead of the recent announcement of the UAE’s decision to withdraw from OPEC, OPEC+ from May 1. Our spokespersons at Saxo Bank and Elevate Financial Services have shared their insights on this topic.

Ole Hansen, Head of Commodity Strategy, Saxo Bank

The UAE has decided to leave OPEC, effective 1 May, as it pursues a strategic realignment in the wake of the Iran war. A conflict that has not only severely disrupted regional energy flows but also drained global commercial and strategic crude inventories, leaving the market facing a prolonged rebuilding phase once hostilities end.

Several Gulf producers may struggle for some time to restore output to pre-war levels due to infrastructure damage, logistical bottlenecks, and the time required to normalise exports. At the same time, strong demand to rebuild depleted commercial stockpiles and replenish strategic reserves is likely to underpin crude demand well beyond the end of the conflict.

Against that backdrop, the UAE has seized the opportunity to exit OPEC, removing the production quota straitjacket that for years frustrated the oil-rich nation and limited its ability to fully utilise a steadily expanding production capacity. Before tumbling last month to 2.2 million bpd, UAE production had gradually risen to around 3.6 million bpd, while its stated crude production capacity currently stands at 4.85 million bpd, with an official target of 5.0 million bpd by 2027 through continued upstream investment led by ADNOC.

In the short- to medium term, the market should be able to absorb additional UAE barrels given depleted global inventories and the need to rebuild reserves. Over time, however, the departure raises a broader strategic question: if other producers begin prioritising market share over quota discipline, OPEC’s ability to manage orderly markets through coordinated supply adjustments may increasingly be called into question.

 Madhur Kakkar, Founder & CEO, Elevate Financial Services

The UAE has announced its withdrawal from OPEC and OPEC+ effective May 1, 2026, marking a significant shift in global oil dynamics amid high prices and supply disruptions linked to the US-Iran war and tensions in the Strait of Hormuz.

Reasons behind the decision include alignment with the UAE’s long-term strategic vision, continued development of its energy sector, and investments aimed at boosting domestic production capacity. The move also reflects national interests amid heightened geopolitical volatility, alongside quota constraints that have limited output.

In terms of impact, the UAE holds significant spare capacity alongside Saudi Arabia, which could affect OPEC’s market influence and its ability to manage spare supply. In the short term, oil price effects appear muted due to ongoing Hormuz disruptions and strong demand for stock replenishment. However, over the longer term, this could introduce greater volatility and potential price corrections if UAE production increases meaningfully.