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Tue, 28 Apr 2026

Tue, 28 Apr 2026 Faisal Islam: Why the UAE's exit from Opec is a big deal

It will have little effect on the current oil blockades, but it could change everything afterwards.

* The UAE has announced its exit from Opec, citing limitations on production due to quotas.
* This move follows long-term reconsiderations by the UAE, which had invested heavily in spare capacity but was restricted by Opec's allocation system.
* The timing of the exit may be linked to tensions with Iran and Saudi Arabia, as well as the pressure cooker in the Gulf region.
* The UAE plans to increase production to 5 million barrels per day and may build new pipelines bypassing the Strait of Hormuz.
* This move could lead to an oil price war between Saudi Arabia and the UAE, with potential consequences for poorer Opec members.
* The exit from Opec highlights the organization's declining importance in world energy markets, where alternative sources are increasingly prominent.
* Global oil demand may plateau as electric vehicles become more widespread, and the UAE is well-positioned to benefit from this trend.
* The move could spark further dominoes falling in the Gulf region, with pressure on Saudi Arabia to respond.