On May 1, 2026, the United Arab Emirates officially withdrew from OPEC and the OPEC+ agreement. The UAE is a significant participant in the global oil and refined products market. A potential increase in production of 1,5M barrels per day, equivalent to approximately 1,4% of average global daily consumption, could place additional pressure on oil prices. A more material risk would be a subsequent price war if, for example, Saudi Arabia also increases output to preserve or expand its market share.
Both countries have relatively low production costs. Under a severe scenario, price pressure could be substantial. At present, however, this scenario appears remote.
Risks for the global oil market and prices
The market is currently influenced by opposing factors. Supply and production volumes have declined, while damage to infrastructure means that restoring regional production capacity will take time. Purchases for strategic reserves by individual countries could provide further support for prices.
Under a scenario of a rapid end to the conflict, the implications of the UAE’s exit from OPEC would likely emerge over a period of approximately one to one-and-a-half years, rather than immediately.
Near-term market and price reaction
In the short term, a material impact on prices is unlikely. The market remains undersupplied, production has declined in several countries in the region, and infrastructure restoration and the commissioning of new capacity will take time.
In other words, changes in individual producers’ strategic decisions would not immediately add supply to the market. There are therefore limited fundamental grounds for a sharp decline in prices at present.
Likelihood of further OPEC exits
The risk of a chain reaction appears limited at this stage. History shows that the departure of individual countries from the cartel does not necessarily trigger similar decisions by other members. Qatar, for example, left OPEC in 2019, but this did not prompt a broader reassessment of membership by other countries.
OPEC still controls significant production volumes and retains its ability to influence the global market. At the same time, investment in drilling new oil wells in the United States is declining moderately. Given the characteristics of shale production, this could reduce supply over the medium term.
Before the conflict in the Persian Gulf, the United States remained one of the principal sources of production growth, placing pressure on the market. Even at elevated prices, oil companies are now exercising investment discipline, as they remain uncertain whether current pricing conditions and geopolitical tensions will persist long enough to support the economics of new projects. As a result, higher production in Arab countries could offset part of the supply shortfall over the long term.
What is happening in practice
UAE production is already increasing. According to Reuters, the country’s oil production approached record levels in June 2026, exceeding 3,8M barrels per day. This supports Abu Dhabi’s strategy of increasing output without regard to quotas. Other OPEC+ members have maintained unity: in May, alliance members agreed to a moderate increase in June production quotas, without directly referring to the UAE’s exit, indicating the cartel’s intention to continue coordination.