Thursday - April 30, 2026
DELFINEO Value Investing Research & News
EN / FR
← Back to news

‘The beginning of the end of Opec’: can the cartel survive the UAE’s exit?

— Summary

The United Arab Emirates announced on Tuesday it will leave Opec, stripping the 66-year-old oil cartel of its third-largest producer and one of its most influential members. Brent crude rose for a seventh consecutive day, but the move was driven by fears around the closure of the Strait of Hormuz rather than the UAE’s exit, a signal of how far Opec’s market influence has eroded.

Excluding the UAE, Opec produced around a quarter of the world’s oil last year, down from roughly half at its peak. The wider Opec+ group still accounts for around 40% of global output. Tensions with Saudi Arabia date back almost a decade: Abu Dhabi has been pushing to expand its production capacity from 3 to 5 million barrels per day (originally targeted for 2030, then accelerated to 2027), repeatedly clashed over its quota, and was accused by Saudi-aligned voices of “naughty boy” over-production. Saudi Arabia, Iraq and Kuwait still account for more than half of Opec output, but Iran’s control of the Strait of Hormuz — through which one-fifth of global oil normally passes — has further diluted the cartel’s leverage.

Indonesia, Qatar, Ecuador and Angola have all left Opec in recent years; the UAE’s departure is unlikely to be “fatal”, say analysts, but a follow-on by Venezuela, Iraq or Iran would significantly weaken the bloc. UBS analysts expect the move to weigh on long-term oil prices as the UAE produces more freely. Source: Financial Times, 29 April 2026, Verity Ratcliffe and Malcolm Moore.

Why it matters

Opec’s declining relevance is the real story. As US shale grew and Opec+ output discipline frayed, traders increasingly read Trump’s social-media posts rather than Opec communiqués. With Iran able to halt much of the cartel’s flows via Hormuz, Opec’s pricing power is now hostage to a single chokepoint.

The UAE-Saudi rift is a decade old: Abu Dhabi raised its capacity target to 5 mbd, fought for a higher quota in 2021 by threatening to leave, and was repeatedly accused of producing above its limits. The Iran war exacerbated geopolitical fault lines (Yemen alignments, business-hub rivalry).

Risk: a domino effect. If Venezuela, Iraq or Iran follow, Opec’s ability to set prices collapses. UBS expects long-term oil prices to be lower as the UAE pumps more freely; Bob McNally of Rapidan thinks the UAE may regret leaving when the next oversupply cycle hits.

Further reading

All stories →