By The United Arab Emirates announced Tuesday that it will withdraw from the Organization of the Petroleum Exporting Countries, a move that comes as President Donald Trump’s confrontation with Iran and broader pressure on global energy markets begin to fracture the cartel’s long-standing cohesion.
The exit marks one of the clearest signs yet that OPEC’s ability to coordinate supply is weakening under the strain of geopolitical conflict and shifting market incentives. With the Strait of Hormuz largely inaccessible amid the Iran war, member states face growing pressure to act independently to stabilize revenues and secure export routes.
The country has been working with the White House to receive a “financial safeguard” from the United States in the aftermath of the Iran War.
Analysts say the UAE’s departure positions it to increase output outside OPEC constraints, even as logistical barriers complicate the immediate ability to bring additional barrels to market.
“Following its exit, the UAE will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions,” the country’s state-run news agency reported.
The UAE has ranked as OPEC’s third-largest producer in recent years, behind Saudi Arabia and Iraq. Abu Dhabi first joined the organization in 1967, remaining a member after the UAE’s independence in 1971, making its withdrawal a significant institutional break.
The announcement underscores how the current U.S. posture toward Iran—combining military pressure with disrupted shipping lanes—has begun to reshape the incentives underpinning OPEC’s coordinated production model, noted The Washington Post. As supply routes tighten and price volatility increases, the value of centralized output agreements diminishes, particularly for producers seeking flexibility.
In its statement, the UAE pointed to continued long-term growth in global energy demand despite near-term instability. “While near-term volatility, including disruptions in the Arabian Gulf and the Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand over the medium to long term,” the statement read.
Energy analysts described the move as a structural shift for the cartel. “While near-term effects may be muted given ongoing disruptions in the Strait of Hormuz, the longer-term implication is a structurally weaker OPEC,” said Jorge Leon of Rystad Energy.
Oil markets reacted sharply as diplomatic efforts with Iran stalled. U.S. West Texas Intermediate crude rose above $100 per barrel for the first time since April 10, reaching nearly $102 in early trading, while Brent crude climbed to around $113 per barrel.
Gasoline prices in the United States have also moved higher, with the national average for regular fuel reaching $4.18 per gallon on Tuesday, according to AAA—the highest level recorded so far this year.
Prices had fallen earlier in April following a ceasefire announcement by Trump on April 7, when Brent crude dropped more than 17% by April 17 after Iran indicated the Strait of Hormuz would reopen to commercial shipping. When that reopening failed to materialize, markets reversed course, pushing prices higher.
Financial institutions have since revised their forecasts upward. Goldman Sachs raised its year-end projections and delayed expectations for a normalization of Persian Gulf exports until late June, now forecasting U.S. crude at $83 per barrel in the fourth quarter, up from $75, and lifting its Brent outlook by $10 to $90.
Citigroup took a more aggressive position, warning that Brent could spike as high as $150 per barrel and average $130 through the third quarter before easing toward $100 later in the year.
Goldman analysts estimate that roughly 14.5 million barrels per day of crude production in the Persian Gulf region have been sidelined by the conflict, amplifying the pressure on global supply.
The disruption has also tightened jet fuel availability, prompting airlines to reduce flights worldwide. JPMorgan analyst Natasha Kaneva said demand is expected to weaken further into May as carriers in Asia and Europe cut schedules.
“Gasoline prices have risen far less than distillates so far, reflecting limited reliance on Gulf supply,” she wrote. However, that buffer “is likely to fade, especially as seasonal demand strengthens into the U.S. summer driving season.”
Taken together, the UAE’s exit reflects a broader unraveling of the coordination mechanisms that have defined OPEC for decades. As geopolitical pressure reshapes supply routes and national incentives, the cartel’s ability to function as a unified pricing force appears increasingly constrained as Trump implements his America First foreign policy.
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