The announcement by (OPEC), as well as the expanded OPEC+ group, is not just an isolated movement by a country unhappy with the lack of flexibility in production in response to market demand, but is located in a broad context of measuring forces on the global chessboard. Analysts and experts are today focusing on the reasons and consequences of the decision.
Officially, UAE authorities communicated that the decision follows “a comprehensive review of the UAE’s production policy and its current and future capacity, based on our national interest and our commitment to effectively contribute to meeting urgent market needs”. They also highlighted “sovereign responsibility in a new energy era.”
The statement also gave a longer-term dimension to the announcement, taking some of the weight away from the current difficult situation. “While short-term volatility, including disruptions in the Persian Gulf and Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand in the medium to long term,” they explained.
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The local government highlighted its intention to maintain the UAE as a “reliable and responsible energy partner” and stressed that the decision will increase flexibility to respond to market dynamics while continuing to contribute to stability in a measured and responsible manner.”
It was therefore quite clear that the group of countries wants to break out of the bonds of the cartel headed by Saudi Arabia. A movement that has already been done recently by Qatar (2019) and Angola (2024).
InfoMoney listed some reasons and consequences in the short, medium and long term of this decision.
What is OPEC?
OPEC is an intergovernmental organization that brings together some of the world’s main oil-producing nations. Founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, it was an initiative to reduce the control exercised by the large international oil companies known as the “Seven Sisters” (Exxon, Shell, BP, Mobil, Texaco, Gulf and Chevron), which controlled production and decided prices.
Since then, member states have met regularly and reached agreement on how much oil each country will produce. If production is cut, global supply tightens and prices rise. When the decision is reversed, production increases, supply increases and prices fall. Since the first oil crisis in 1973, when a producer embargo multiplied the price of oil by four, OPEC has exerted enormous influence on the global economy.
What is the role of the United Arab Emirates in the cartel?
The entry predates the creation of the Federation of Seven Emirates, in 1971: Abu Dhabi joined OPEC in 1967. Today, the country is the third largest product within the group, which accounts for around 30% of global oil supply.
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But the UAE has taken the opportunity to diversify its economy since then. It is estimated that non-oil sectors represent around 75% of gross domestic product (GDP), although the country continues to invest in expanding oil and gas capacity – and renewable and low-carbon energy.
According to reports on the Gulf News website, leaving OPEC and OPEC+ removes the United Arab Emirates from collective production agreements. In other words, the country will no longer need to operate under production quotas established by the group and will be able to determine production levels based on its own capacity and market conditions.
The UAE’s plans are to increase production capacity from around 3.4 million barrels per day to 5 million barrels per day by 2027.
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Effects of war
Production from countries within OPEC fell 27% to 20.79 million barrels per day in March after a disruption that removed 7.88 million barrels per day from supply. This recent drop even surpassed the cuts seen during the demand shock caused by Covid-19 in 2020, and even surpassed previous supply disruptions in the 1970s and 1991.
The closure of the Strait of Hormuz left about 140 million barrels of oil trapped in the Persian Gulf, equivalent to about 1.4 days of global demand.
In addition to blocking the passage, Iran carried out attacks on the infrastructure of Gulf countries, simultaneously incapacitating Saudi Arabia, the United Arab Emirates, Kuwait and Iraq. Thus, four of OPEC’s largest producers were effectively removed from global markets at the same time.
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The Ras Tanura refinery and crude oil export terminal – one of the largest in the world – was closed after attacks and Saudi Aramco, the institution through which Saudi Arabia exercises its leadership in OPEC, is operationally compromised.
There is also distrust among the cartel’s partners, following reports that oil tankers from Saudi Arabia and other producers significantly increased their exports in the weeks immediately preceding both the June 2025 attacks on Iranian nuclear installations and the February 2026 operation, both commanded by the US.
Winner 1: USA
Although it is too early to declare that the UAE’s decision will benefit more, a reduction in OPEC’s power meets the wishes of Donald Trump, who has already gone public a few times to complain about the cartel’s excessive power, whom he accused of “stealing the world” by seeking to keep prices high.
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And as the Atlas Institute for International Affairs recalled a few weeks ago in an analysis of OPEC’s power, the US is simultaneously the world’s largest oil producer and one of the main targets of the organization’s pricing power. Since the shale revolution transformed American energy production, Americans have been in direct structural competition with OPEC nations for global market share. In other words, “every barrel of production that OPEC cuts to support prices is a competitive advantage delivered to American producers”.
Trump also understands that the ability to manipulate the price of the commodity that rules the world is, in geopolitical terms, an enormous power. Thus, the functional “destruction” of OPEC would offer the United States several benefits, one of them being the weakening of rival oil countries (Russia, Iran and, until recently, Venezuela), whose national budgets depend on increased oil revenues. Another point in the US’s favor is a possible acceleration of the energy transition, in which American technology and capital are better positioned to lead.
Winner 2: China
Another winner should be China, the world’s largest oil importer, for the simple reason that every dollar of OPEC’s pricing power is a tax on the Chinese economy. The loss of power OPEC would represent is likely to bring a huge long-term economic benefit to Beijing, says think tank Atlas Institute. These benefits would come from cheaper energy inputs across its industrial base, reduced vulnerability to supply disruptions, and freedom to source energy competitively in a fragmented global market.
Another point mentioned is that China has also positioned itself as the main manufacturer of technologies that will one day replace oil: solar panels, batteries, electric vehicles, wind turbines. “A Middle East in structural decline as an energy supplier is, from Beijing’s long-term perspective, a Middle East that cannot obstruct China’s dominance in clean energy,” the think tank says.
Russia – the biggest loser?
The power exercised by Russia in recent decades is directly linked to its oil production. Even after heavy sanctions, especially from Europe, Vladimir Putin’s regime has still managed to finance its war of territorial expansion in Ukraine, often using a ghost fleet of oil tankers.
Therefore, if the hollowing out of OPEC ultimately leads to a structural collapse in oil prices—as American shale dominance and the accelerating energy transition combine to create a prolonged oversupply—Russia will face the same reckoning as any other oil-dependent economy—and without having preserved the regional allies that could have helped it manage the transition.
