BAKU, Azerbaijan, April 29. The exit of the United Arab Emirates (UAE) from OPEC and OPEC+ is expected to impact the oil market landscape in 2027 and beyond, Trend reports citing Wood Mackenzie.
On 28 April 2026, the UAE announced its exit from OPEC and OPEC+ effective on 1 May 2026. The country’s Ministry of Energy and Infrastructure said the decision follows a review of production policy and capacity outlook and aligns with its strategy to accelerate domestic energy investment. The UAE reaffirmed that its production policies will be responsible and guided by market stability.
“The UAE’s exit from OPEC is momentous, and undoubtedly the biggest schism in the organisation since it was founded in 1960. The UAE, a member since 1967, has risen by developing its vast resources to become OPEC’s second-largest producer by liquids capacity today,” reads the latest released by Wood Mackenzie.
Wood Mackenzie analysts point out that the UAE is in a unique economic position to walk away from OPEC.
“It has a much larger share of unused productive capacity compared with other members, that without the current restrictions it can put to use. Furthermore, the UAE has much lower fiscal oil price breakevens relative to its peers, leaving its economy relatively resilient and better able to sustain a potential period of low prices,” reads the report.
Wood Mackenzie experts note that the UAE’s decision to leave OPEC comes at a moment when its short-term production capacity is already limited due to the continued closure of the Strait of Hormuz, which is constraining any immediate impact on global supply. With around 2 million b/d of offshore output currently offline, the country has limited room to raise production in 2026, regardless of policy direction. Even after transit through the Strait resumes, restoring output to pre-conflict levels could take up to six months. As a result, the UAE’s withdrawal is expected to have more significant implications for supply dynamics from 2027 onwards.
“The country has committed to investing US$145 billion (real, 2026) in its domestic upstream oil sector over 10 years to 2030. The overarching goals are to sustain oil production and expand capacity from under 4 million b/d in 2020 to 5 million b/d by 2027. By 2024, capacity had reached 4.85 million b/d. OPEC+ quotas, however, have constrained output well below capacity, to the UAE’s growing frustration. In 2021, OPEC+ talks stalled as the UAE pushed for a higher baseline. The eventual compromise, to raise the baseline from 3.17 million b/d to 3.5 million b/d from May 2022, only partially reflected capacity growth.
The UAE has the capability to take a growing share of global oil demand in 2027 and beyond, which challenges OPEC’s current policy of unwinding its voluntary cuts, and increases the risk of oversupply weakening prices. If tensions escalate, competition between the UAE and OPEC for market share could send medium-term oil prices sharply lower,” note the analysts.