One of the world's largest oil producers has left — and the entire organization felt it. After the UAE's exit from OPEC, the cartel's aggregate production fell to levels from the late 1980s. For comparison: at that time, the Soviet Union still existed, and oil cost less than $20 per barrel.
The UAE had long been inclined toward an independent strategy. Abu Dhabi was increasing its own capacities and increasingly rarely agreed with the quotas that OPEC set to restrain supply. The exit is a logical conclusion to this friction, not a sudden decision.
A separate factor is war. Conflicts in Gaza, instability in the Red Sea, and the threat of escalation between Iran and Israel keep the region in constant tension. This is not merely a logistics issue: some producers physically cannot meet their declared quotas due to damaged infrastructure or forced operational cutbacks.
Saudi Arabia, which traditionally serves as the "swing producer" — the country that regulates supply for price stability — found itself facing a dilemma. Compensating for the UAE's loss single-handedly means exhausting its own spare capacity. Not compensating means allowing prices to rise, which is beneficial in the short term but in the long run pushes buyers toward accelerating the energy transition.
Oil prices reacted with growth, but analysts warn: if the US and other non-cartel producers increase output in response to price signals, the effect for OPEC will be the opposite — a smaller market share amid the same price volatility.
The question is not whether the UAE will return to the cartel. The question is whether OPEC can maintain discipline among those who remain — especially if the Middle East war drags on for another year and each participant begins fending for itself.
