In Five Charts: The UAE’s Withdrawal and Its Impact on Opec’s Control Over Oil Prices

In five charts – The United Arab Emirates’ decision to withdraw from the Organisation of the Petroleum Exporting Countries (Opec) and operate independently has sparked concerns about the group’s ability to maintain its traditional role in shaping global oil prices. Analysts warn that this move could mark a pivotal moment in Opec’s history, with one describing it as “the beginning of the end of Opec.” The timing of this potential exit coincides with a period of heightened instability in the oil market, driven by geopolitical tensions and supply disruptions.

Opec’s Origins and Membership

Opec, formally established in 1960, was founded by five nations—Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela—to safeguard the economic interests of oil-producing countries. The group’s primary objective was to coordinate production levels and ensure stable revenue for its members. Over time, its membership has expanded and contracted. Today, it includes Algeria, Equatorial Guinea, Gabon, Libya, Nigeria, and the Republic of the Congo, among others.

The organisation’s influence has grown and waned throughout its history. For instance, in 2016, Opec joined forces with ten additional producers, such as Russia, to form the Opec+ alliance. This collaboration allowed the group to exert more control over global oil markets, particularly during periods of price volatility. However, the UAE’s potential exit raises questions about whether Opec can still act as a unified force in the modern energy landscape.

The Mechanism of Price Influence

Opec’s ability to influence oil prices hinges on its capacity to adjust production levels. By increasing output, the group aims to flood the market and drive prices down. Conversely, reducing supply can help maintain higher prices, especially when demand is weak. This strategy has historically been a key tool for Opec to stabilize or boost revenues.

For example, during the 1973 Arab oil embargo, Opec members imposed a supply cut in response to the US-Israel conflict. This led to a dramatic spike in oil prices, with global crude costs doubling within months. The 1979 Iranian Revolution further amplified these effects, creating a second oil shock that reshaped energy markets for decades.

More recently, Opec+ responded to the coronavirus pandemic by slashing production in 2020, which helped counteract the sharp decline in demand. However, its reaction to the 2022 Russia-Ukraine war was more cautious, initially pledging a slight production increase before reducing output later in the year. These contrasting approaches highlight the group’s evolving strategies and the challenges of maintaining consensus among its members.

Critics and Internal Disputes

Some observers, including former US President Donald Trump, have accused Opec of manipulating oil prices to its advantage. They argue that the group’s actions—such as limiting supply—have kept prices artificially elevated. This criticism is compounded by internal disagreements, which have weakened Opec’s effectiveness over the years.

Maurizio Carulli, a global energy analyst at Quilter Cheviot, notes that Opec’s influence on oil prices has been “varied” in recent decades. He highlights a persistent challenge: the lack of adherence to agreed production targets by individual members. For instance, nations like Kazakhstan and the UAE have frequently exceeded their quotas, undermining Opec’s collective strategy. Carulli says this behavior has been “widespread” and has eroded the group’s credibility as a unified entity.

Despite these internal fractures, Opec remains a major player in the global oil market. However, its share of international crude production has steadily declined. According to the latest Opec data, the group accounts for 36.7% of global output in 2025, down from over 52.5% in 1973. This reduction has allowed non-Opec countries, such as the US, Canada, and Brazil, to gain more prominence in energy trade.

Current Market Dynamics

Recent events have further complicated Opec’s influence. The US-Israel conflict with Iran has triggered the largest oil supply loss on record, according to the World Bank. Meanwhile, the prolonged closure of the Strait of Hormuz—through which approximately 20% of the world’s oil and liquefied natural gas flows—has intensified market uncertainty. For eight weeks, the critical waterway was effectively blocked, disrupting global supply chains.

Carulli argues that the UAE’s departure from Opec would have minimal impact on short-term oil exports. Even with the group’s influence diminished, the UAE is still one of its largest producers. In 2025, the nation is projected to produce 3.1 million barrels per day, placing it fourth in Opec’s rankings behind Saudi Arabia, Iraq, and Venezuela. If the UAE joins forces with non-Opec countries, it could potentially increase output by up to one million barrels daily, altering the balance of power in the market.

Nonetheless, the broader shift in oil production dynamics is already underway. The US has emerged as the world’s leading oil producer since 2018, churning out 13.6 million barrels per day in 2025. Russia, a key Opec+ member, follows closely with 9.1 million barrels per day. These figures underscore the growing competition between Opec and non-Opec nations in shaping market conditions.

Opec’s Evolving Role

Opec’s influence on oil prices has gradually diminished, particularly in recent years. While the group once dominated global markets, its current role is more nuanced. Carulli suggests that the organisation’s ability to control prices has shifted toward the US, which now holds significant sway due to its vast production capacity. This transition reflects broader changes in the energy industry, where geopolitical alliances and market forces play a more complex interplay.

Historically, Opec’s strategic interventions—such as the 1973 and 1979 embargoes—were instrumental in shaping oil prices. However, modern challenges like technological advancements, diversification of energy sources, and the rise of shale oil have diluted its impact. The UAE’s exit may accelerate this trend, as the group loses one of its key members. Yet, the long-term consequences depend on how the UAE and other Gulf states adapt to the new landscape.

Analysts stress that Opec’s influence remains vital, though it is no longer as absolute as it once was. The group’s ability to act collectively is crucial, but individual members’ priorities often take precedence. For example, the UAE’s decision to prioritize its own economic interests over Opec’s collective goals could signal a broader trend of member states asserting independence. This shift may challenge Opec’s traditional dominance, forcing it to rethink its strategies in a more competitive market.

Conclusion and Outlook

The UAE’s potential exit from Opec is a significant development that could reshape the organisation’s role in the global oil market. While the group may still hold substantial influence, its ability to coordinate production cuts and price adjustments is now more fragile. The recent supply disruptions and the rise of non-Opec producers like the US and Russia indicate a new era of energy geopolitics, where no single entity can dictate market trends with the same certainty as in the past.

“The shift in influence to the US has been particularly notable in recent weeks,” says Carulli. “Gulf members of Opec, including the UAE, are increasingly prioritizing their own economic interests over collective decisions.”

As the oil market continues to evolve, Opec must navigate a landscape defined by both cooperation and competition. The UAE’s departure could be a catalyst for this transformation, challenging the group to either strengthen its unity or accept a reduced role in global energy dynamics. Whether Opec can adapt to these changes will determine its relevance in the years to come.