The United Arab Emirates formally withdrew from OPEC effective May 1, ending a membership that dated to the organization’s founding in 1960 and accelerating a split within the cartel that has widened since the US-Iran war began February 28.
Abu Dhabi announced the decision April 28, citing irreconcilable differences over production quotas and the UAE’s strategic need to manage its own output independently during the Hormuz crisis. OPEC’s secretariat confirmed the withdrawal in a statement Thursday. The UAE is the cartel’s third-largest producer and had been one of its most consistent quota violators, regularly pumping above its assigned ceiling.
The UAE’s exit from OPEC removes the only mechanism that constrained its production. ADNOC has operated above its OPEC quota for years and now faces no ceiling. With capacity of approximately 4.5 million barrels per day against current production near 3.3 million, the UAE has room to push more oil to market immediately. It does not need the Strait of Hormuz to do it — the Fujairah pipeline moves up to 1.5 million barrels per day directly to the Gulf of Oman, bypassing the closure entirely. More UAE oil reaching buyers who cannot get Gulf crude through the strait puts direct downward pressure on prices at a moment when the rest of OPEC has lost its ability to coordinate a response.
The Fujairah pipeline — the Abu Dhabi Crude Oil Pipeline — runs 380 kilometers from Habshan in the Abu Dhabi interior at the port of Fujairah on the Gulf of Oman. It was built following the 2011 Arab Spring specifically to give the UAE an export route independent of the strait. With Hormuz largely closed to commercial traffic since late February, Fujairah has become the UAE’s primary export terminal.
The UAE also issued a statement Thursday calling Iranian assurances over the strait untrustworthy, aligning publicly with the US-led Maritime Freedom Construct coalition the State Department announced the same day. Iran’s state news agency IRNA reported Friday that Tehran delivered a new negotiating proposal to Washington through Pakistani mediators Thursday evening. The content was not disclosed.
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