The UAE’s exit from OPEC and OPEC+ shakes global oil markets amid the Hormuz crisis, exposing deep geopolitical fractures in the Gulf.
Why the UAE exit from OPEC reshapes global oil dynamics
The UAE exits OPEC and OPEC+, delivering a major blow to the Organization of the Petroleum Exporting Countries and its de facto leader, Saudi Arabia. The move comes at a time marked by the war in Iran, which has triggered one of the most severe energy crises in modern history and destabilized the global economy.
Gulf OPEC producers were already facing mounting pressure due to Iranian threats and attacks on vessels in the Strait of Hormuz, a critical chokepoint through which roughly one fifth of the world’s crude oil and liquefied natural gas normally flows.
The weakening of the cartel could benefit the United States, potentially opening space for the creation of an alternative group of producers. Donald Trump accused OPEC of “robbing the rest of the world” by deliberately inflating oil prices, adding that while the US protects OPEC members, they “take advantage by imposing high prices.”
Political tensions behind the UAE decision
The decision appears to stem from growing tensions between the United Arab Emirates and other Arab states. Abu Dhabi has accused fellow OPEC members of failing to provide adequate protection against repeated Iranian attacks during the war.
Anwar Gargash, diplomatic adviser to the UAE president, openly criticized the Arab response during a session at the Gulf Influencers Forum.
“Gulf Cooperation Council countries supported each other logistically, but politically and militarily, I believe their position has historically been the weakest,” Gargash said.
“I expected this weakness from the Arab League and was not surprised, but I did not expect it from the Gulf Cooperation Council, and I was shocked.”The UAE is now accelerating its diversification strategy. Holding nearly 6% of global oil reserves, the country is shifting toward a broader energy mix where renewable sources, particularly solar and wind, are expected to play a leading role. This trajectory mirrors trends seen across parts of Africa, where countries are increasingly balancing fossil fuel revenues with investment in renewables.
Oil prices react amid ongoing uncertainty
Crude oil futures climbed to multi-week highs as diplomatic efforts to resolve the crisis in the Strait of Hormuz remain stalled.
“Much of the sentiment that drove markets in recent weeks is giving way to a more bearish outlook,” said Florence Schmit, analyst at Rabobank, speaking to Bloomberg.
However, following the historic UAE announcement, oil prices pulled back from intraday highs. Brent crude briefly dropped by nearly USD 2 before recovering, reflecting extreme tension in physical markets.
The muted reaction suggests investors are already pricing in a prolonged disruption in the Strait of Hormuz. Meanwhile, major financial institutions such as Citigroup and Morgan Stanley have once again raised their oil price forecasts.
