Cartel members are not always a congenial bunch. Relations can get frosty and brittle over time. With the United Arab Emirates, membership of the Organisation of the Petroleum Exporting Countries (OPEC) has not been without its troubles, not helped by the increasingly snarky relationship it shares with the group’s de facto leader, Saudi Arabia. To be part of such a group entails mindful restraint, an understanding about production targets and a curbing of individual initiative. The statute of the group states its goal: to “devise ways and means of ensuring the stabilisation of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations.”

The group has been battered of late, notably in the field of diminished supply. The blockade of the Strait of Hormuz arising from the Iran War saw a fall of almost 8 million barrels of oil per day in March, a 27.5% decline from February numbers. Supply falls were registered in Saudi Arabia, Kuwait, the UAE and Iraq. The fall for the UAE was in the order of 1.5 million barrels a day. But the Emirates has also suffered punishing barrages from Iranian missile and drone attacks, a problem officials feel has been inadequately addressed by such groups as the Gulf Cooperation Council and the Arab League.

On May April 28, the UAE announced it was exiting OPEC and the umbrella OPEC+ organisation “effective 1 May 2026.” (The departure follows that of Qatar in 2019, when its priorities shifted to the pursuit of natural gas.) The decision reflected, in the hideous, dead jargon of middle management, “the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets.”

The usual anodyne, non-committal commitments are noted. “Following its exit, the UAE will continue to act responsibly, bringing additional production to market in a gradual, measured manner, aligned with demand and market conditions.” The decision did not alter the state’s “commitment to global market stability or its approach based on cooperation with producers and consumers.” Instead, it enhanced the “ability to respond to evolving market needs.”

Behind this abominable language lies a less than obscured objective. The UAE has been the country with the second highest spare production capacity in OPEC. Being so placed, it was a runner-up in terms of influencing production levels to ease oil prices. Under the quota restrictions of the group, the state was limited to 3 to 3.5 million barrels per day, a threshold that effectively meant lost revenue. In words spoken to The New York Times, the country’s energy minister, Suhail Al Mazrouei, “The world needs more energy, the world needs more resources and UAE wanted to be unconstrained by any groups.”

The inevitable commentary on the implications of the UAE’s exit has followed. The BBC economics editor, Faisal Islam, ponders them: “It’s not just that the UAE, when it can get its oil fully back on the market by sea or pipeline, is likely to target 5 million barrels per day production. Saudi Arabia might respond with an oil price war that the UAE’s more diversified economy could withstand, but poorer OPEC members might not.”

Priya Walia, oil analyst at the consultancy Ryland Energy, offers this assessment: “By stepping outside the quota framework, it reshapes future expectations and weakens OPEC+’s control over spare capacity, as well as the assumption that future supply will be managed through coordinated restraint.”

Emirati officials have dared to dream, speaking of new pipelines from the oil fields of Abu Dhabi that will bypass the Strait of Hormuz and link the port of Fujairah. The motivation for such sentiments is captured by remarks made by Yossi Abu of the Israeli company NewMed Energy. “You need oil pipelines, railway connectivity, throughout the region, onshore, without giving others bottlenecks to choke us.”

Inspiration for this has accrued from Saudi Arabia’s own East-West pipeline, running for 1200 kilometres and built in in the 1980s for fear of the Strait’s closure during the Iraq-Iran War. The pipeline serves to deliver a daily complement of 7 million barrels of oil to the Red Sea port of Yanbu, avoiding the Hormuz tangle.

Issues of market control and spare capacity regarding oil will turn out, over time, to be matters of diminishing value. Across the globe, the Iran War has shaken governments into considering, with frantic urgency, the issue of energy security. Consumers have also made the charge. In March, for instance, the UK saw a rise in plug-in hybrid sales of 47%. Pure electric vehicle (EV) sales rose by 24%. While petrol engines still retained their primacy, they only do so with a falling share of new car registrations (44%) compared with 51.4% for hybrid vehicles and EVs, up from 45% the previous year.

China continues roaring away with its mammoth electrification program as well, a matter that has served to soften global shocks in oil and gas arising from the war. While the European response to oil shocks remains dreary, antiquated and predictable (that same can be said about countries such as Australia) – the usual frenetic diplomatic scuttling to secure more reliable supply, temporary tax cuts and emergency packages for aggrieved consumers – Beijing is clearly of a different view. Given that electrification insulates households from steep rises in fuel costs, the UAE will have to make a dash if it is to raise as much revenue from its oil reserves as it can. But they will still be in a bind till the tankers resume their uninterrupted journeys through the Strait of Hormuz.

Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He currently lectures at RMIT University. Email: bkampmark@gmail.com

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