UAE Quits OPEC—The Oil Cartel’s Collapse Begins

Ajouté : 2026-05-06

[00:00:00]The biggest international news right now would be the UAE's withdrawal from OPEC.

[00:00:03]With the UAE leaving OPEC, the international situation is once again being shaken up significantly. Some are even saying that the oil power structure that has lasted for 61 years might be collapsing. Let's take a proper look at this today. Let's get right into it. The UAE, a leading oil producer in the Middle East, has abruptly announced it will leave OPEC and OPEC Plus starting May 1st. The UAE government announced its decision to withdraw through the state-run WAM news agency on April 28th.

[00:00:29]When announcing the withdrawal, the UAE government said the decision reflects the nation's evolving energy mix, long-term strategy, economic vision, and increased domestic energy investment.

[00:00:39]They also stated that this further strengthens their commitment to playing a responsible, reliable, and forward-looking role in the global energy market. The UAE also stated that by withdrawing from OPEC, they have gained flexibility by being freed from the production quotas imposed by OPEC.

[00:00:54]They said they had no prior direct consultations with any country about leaving OPEC. The core operating method of OPEC was to assign oil production quotas to each member country and control the global supply through the system. This system was very effective in keeping international oil prices above a certain level, but at the same time, it strongly restricted the production strategies of individual countries. For the UAE, this structure increasingly became a burden.

[00:01:18]The UAE has aggressively expanded its production capacity by investing massive capital over the past several years, and has actually raised its capacity to produce more than 4 million barrels per day. However, because of the quotas set by OPEC, the UAE repeatedly found itself unable to fully utilize these facilities. This structure reduced ROI and clashed with the country's economic strategy, while the conflict with Saudi Arabia intensified. Saudi Arabia has preferred production cuts to defend oil prices, but the UAE wanted to increase its market share by expanding production. Within the same organization, their strategic directions clashed. This was not a temporary disagreement, but a structural conflict rooted in fundamental energy policy differences. This decision to withdraw is interpreted as a sign that the conflict has reached a point where it can no longer be resolved. By leaving OPEC, the UAE is no longer bound by external production limits and can freely adjust output based on market demand and its national strategy. This means the previously suppressed production capacity could soon enter the market. Especially considering the recent situation in the Middle East and global energy demand, there is a strong likelihood that the UAE will gradually increase its production. In 2019, Qatar left, and then in 2026, the UAE also withdrew from OPEC, which dealt a major blow to the influence of OPEC led by Saudi Arabia. The UAE was the country with the third largest oil production in OPEC. With this, it's clear that Saudi Arabia's position will be further diminished. In addition, there are some interesting evaluations regarding this decision. Some people are saying that President Donald Trump's strategy has achieved some results. President Donald Trump has strongly criticized OPEC since taking office. He has repeatedly claimed publicly that OPEC is artificially limiting production to drive up international oil prices, and as a result, consumers around the world are suffering. In particular, he even used the term cartel to describe OPEC as manipulating prices against the world, increasing the pressure on them. In this context, the withdrawal of the UAE means more than just a member country leaving.

[00:03:17]Reuters described this as an example of how President Trump's sustained anti-OPEC stance has created real-world fractures.

[00:03:25]The cartel structure, long seen as a problem by the United States, is now starting to weaken from within. The symbolism is important because a country like the UAE, with production capacity and influence, has withdrawn. The Guardian also highlights another aspect.

[00:03:40]The weakening of OPEC's influence also means a reduction in its ability to control prices, which suggests that market volatility could increase even further. Up until now, major oil-producing countries have maintained a certain level of stability by adjusting supply through consultations, but if this structure is shaken, each country will decide its production based on its own interests. In this case, there is a high possibility that oversupply and shortages will repeat, leading to sharp fluctuations in prices.

[00:04:04]Especially in a situation like now, with instability in the Middle East, this kind of volatility can be further amplified. War, maritime blockades, and shifts in supply policies can occur together, making the market volatile and unpredictable.

[00:04:17]In this environment, both consumer and producer countries struggle to predict, making the energy market more unstable.

[00:04:24]Some assessments say this might benefit Korea, as the UAE is its second largest crude oil supplier. About 11.7% of Korea's crude oil imports come from the UAE. If the UAE begins producing independently, it's highly likely that their oil output will increase significantly. If this happens, Korea will likely import energy at lower prices in the mid to long term. Of course, since the Strait of Hormuz is currently blocked, it's difficult to make short-term predictions. With a high chance of increased production in the UAE, some believe Korea could benefit.

[00:04:56]The domestic industry says the UAE's higher oil production could bring improvements and positive impacts. There are also predictions that if the UAE starts increasing production, the OPEC system could be shaken, and other countries might join the competition to increase production, which could lead to a drop in international oil prices. So, why did the UAE suddenly make this choice? As I've mentioned before, the UAE has shown that it really dislikes the policy of limiting oil production under the OPEC system. In particular, there has been a lot of friction with Saudi Arabia. There have been numerous conflicts with Saudi Arabia, including over proxy conflicts. The UAE and Saudi Arabia have continued to clash in Africa and the Middle East. However, some say that this recent Middle East war may have sealed it. The UAE was heavily targeted by attacks from Iran. However, the Gulf Cooperation Council, led by Saudi Arabia, has shown a very passive response. They talk about attacking Iran, but in reality, they haven't taken any real action. They only issued strong condemnations and expressed regret. Even when Iranian forces attacked the vital Fujairah and Jebel Ali ports in the UAE, that was their only response. The UAE expected and demanded the immediate activation of the Peninsula Shield Force and a strong joint military response, but the Gulf Cooperation Council responded passively. South Korea responded faster by delivering munitions and greatly aiding the UAE's defense, which speaks for itself. Because of this, it seems that the UAE made up its mind to leave OPEC with the Middle East war as a turning point. The UAE seems to be pursuing a policy focused on national interest to boost its market share and maximize oil sales internationally, even if that leads to a gradual drop in oil prices. Concerns are definitely being raised about this. If the power struggle between Saudi Arabia and the UAE, which are at the core of OPEC, intensifies, the already unstable situation in the Middle East due to war could become even more unpredictable. Market fear during a production cut agreement collapse can temporarily spike oil prices, regardless of real supply and demand. Therefore, it's important for Korea to fully understand this situation. Right now, Saudi Arabia and the UAE are countries that have shown sharp rivalry over Yemen. So, it seems inevitable that conflicts between Saudi Arabia and the UAE will continue to occur in the future. There's another point we need to pay more attention to here. The UAE's withdrawal likely isn't a one-time event, as there's already precedent. In 2019, Qatar left OPEC to focus on a gas-based strategy, and ongoing complaints have persisted within the organization since then. In 2024, Angola also left OPEC due to issues with production quotas, and the rift is growing larger.

[00:07:26]Looking at this trend, we can see one thing in common. Each country is now choosing to expand production and increase market share rather than maintaining prices.

[00:07:33]Countries that have expanded their production capacity but remain limited by quotas will become increasingly dissatisfied. OPEC's structure is increasingly clashing with each country's economic strategies. Some member countries have already been unofficially producing above their quotas or have shown a lukewarm attitude toward production cut agreements. On the surface, they are maintaining cooperation, but in reality, you should see it as each country starting to go its own way. In this situation, the fact that an influential country like the UAE was the first to choose to withdraw is interpreted as a very significant signal. Now, for other countries, options have emerged. It's a point where they have to consider whether to stay in the cartel and accept the restrictions or to withdraw and shift to a strategy centered on their own national interests. Especially when oil prices are high, the temptation to increase production becomes much stronger. So, there's a good chance that more countries will consider withdrawing. If this happens, it may become difficult for OPEC to maintain its unity. When one country's withdrawal leads to another, and this trend continues in a chain reaction, the organization itself could be shaken. The current situation may still be in its early stages. You must pay close attention to the possibility that it won't end with just the UAE.

[00:08:40]Ultimately, the UAE's decision is based on the painful lesson that an alliance without security guarantees is meaningless. In fact, when Iran struck Fujairah Port and Jebel Ali Port, which are alternative routes to the Hormuz Strait, with drones last March, the other Gulf Cooperation Council allies showed an almost indifferent attitude.

[00:08:56]For the UAE, there is no longer any reason to be tied to a cartel that cannot fulfill its role when the nation's survival is threatened, especially if it also restricts their production. With increased production capacity, the UAE is expected to invest heavily in its own defense system and fully commit to future energy industries. This marks a shift in the Middle East from a Saudi-led unipolar system to a multipolar one, where countries prioritize their own survival, surpassing just economic factors like oil prices. With the oil power structure beginning to fracture, it's more important than ever for us in Korea, who import over 90% of our energy, to closely monitor whether this becomes a new opportunity amid the crisis or the start of a fierce storm.