When the United Arab Emirates leaves OPEC on May 1, it will not be leaving the club until declaring that the club no longer serves its interests. That distinction is important. Abu Dhabi’s departure is not a response to a single complaint but a combination of three forces: the Iran war, the growing rivalry with Saudi Arabia, and the strategic compromise with Washington that has been in the works for years.
The war between the United States and Israel against Iran has made the UAE a front-line nation in a way it did not fully expect. Iran justified targeting Emirati territory by citing Abu Dhabi’s decades-long strategic alliance with Washington, a title formalized when the United States named the UAE a “major defense partner” in 2024. Iranian strikes hit the industrial area of Fujairah, attacked the port of Jebel Ali, and sent smoke into the skies over Dubai. The UAE has taken this punishment on its own. His Gulf Cooperation Council partners offered solidarity, however, such as the UAE president’s adviser Anwar Gargash. he pointed out clearly at a Gulf Lobby conference on Monday, their political and military response was “the weakest in history.” That frustration, made public on the eve of the OPEC announcement, turned out to be terrifying.
When the United Arab Emirates leaves OPEC on May 1, it will not be leaving the club until declaring that the club no longer serves its interests. That distinction is important. Abu Dhabi’s departure is not a response to a single complaint but a combination of three forces: the Iran war, the growing rivalry with Saudi Arabia, and the strategic compromise with Washington that has been in the works for years.
The war between the United States and Israel against Iran has made the UAE a front-line nation in a way it did not fully expect. Iran justified targeting Emirati territory by citing Abu Dhabi’s decades-long strategic alliance with Washington, a title formalized when the United States named the UAE a “major defense partner” in 2024. Iranian strikes hit the industrial area of Fujairah, attacked the port of Jebel Ali, and sent smoke into the skies over Dubai. The UAE has taken this punishment on its own. His Gulf Cooperation Council partners offered solidarity, however, such as the UAE president’s adviser Anwar Gargash. he pointed out clearly at a Gulf Lobby conference on Monday, their political and military response was “the weakest in history.” That frustration, made public on the eve of the OPEC announcement, turned out to be terrifying.
The Iran crisis has caused an energy shock of historic proportions. Total OPEC output it has collapsed by 27 percent to 20.79 million barrels per day in March, as Iran attacks Gulf infrastructure and threatens to send ships through the Strait of Hormuz to disrupt supply chains. The resulting supply cut, 7.88 million barrels per day in one month, exceeded even the oil embargoes of 1973 and the Gulf War of 1991. The Strait of Hormuz, through which about a fifth of crude and liquid natural gas normally passes, has been the catalyst under the massive siege. In this environment, the UAE, which retains significant production capacity and has spent years investing in expanding it, finds itself holding an incredibly valuable geopolitical asset. Staying within OPEC, with its production limits and consensus-driven governance, would mean co-ordinating the assets to a common system that can no longer adequately represent Abu Dhabi’s interests. The logic of the exit is, in that light, reasonable.
However, the timing and manner of the withdrawal also reflects something deeper: the result of a long-standing rivalry with Saudi Arabia. The Riyadh-Abu Dhabi relationship, often described as the backbone of Gulf stability, has been quietly fraying for years over the central question of who controls oil.
The roots of the conflict date back to 2016, when the OPEC+ alliance was created by Russia and the UAE began to feel that its quotas failed to reflect its rapidly expanding production capacity. The COVID-19 price war in 2020, in which Saudi Arabia led deep engineering cuts, widened the rift. Abu Dhabi saw the reduction as an unfair burden while it had invested heavily in increasing output. By 2021, the UAE was openly rejecting a Saudi-backed production expansion, forcing a standoff that was only resolved by giving Abu Dhabi a maximum baseline of 3.65 million barrels per day. papered consensus on disagreement; it didn’t solve it.
Since then, tensions have grown beyond structural. Saudi Arabia, which needs Brent crude around $80 a barrel to balance its budget and fund its Vision 2030 ambitions, is keen to keep supply under control by high prices. The UAE—whose economy has evolved more aggressively, with Dubai acting as a global hub for finance, logistics and aviation—is less dependent on high oil prices. What Abu Dhabi wants from its oil industry is not price management but a higher rate, the return of billions of dollars invested in expanding the capacity of the Abu Dhabi National Oil Company. These are not just different policy preferences; are different economic models. UAE Minister of Energy confirmed on Tuesday that Abu Dhabi did not even consult with Riyadh before announcing its departure, a detail that says everything about the state of the relationship. Riyadh, the undisputed leader of OPEC, learned about the departure in a press release.
The Washington side of this story is just as important. The Abraham Accords, the strengthening of security cooperation with Israel, the positioning of Abu Dhabi as an indispensable partner in the Gulf—all aim to make the US’s separation from the UAE politically and strategically expensive. That price is now being tested, and Washington seems to have responded. US Treasury Secretary Scott Bessent publicly supported an emergency dollar swap line for Abu Dhabi just days before the OPEC announcement. US President Donald Trump, who has long criticized the OPEC group as exploiting US military protection, has offered Abu Dhabi diplomatic cover and a breakdown. The parallel between the UAE’s desire to produce freely and the Trump administration’s desire to see more oil on international markets at lower prices is not coincidental. It is, in a structural sense, an alignment of interests between Washington and Abu Dhabi that has been going on for years.
The UAE has also been playing the China card very skillfully. Abu Dhabi Crown Prince Khaled bin Mohamed Al Nahyan’s recent visit to Beijing produced a series of economic deals, and Emirati officials have floated the possibility of pricing some oil transactions in yuan if the dollar’s liquidity declines – something like Saudi maneuvering in 2023 that led to the acceleration of diplomatic cooperation between the United States and Riyadh. Abu Dhabi does not rely on China; it uses China to get better terms from Washington. His sovereign wealth funds are still largely directed towards US and European assets. Beijing’s signals are best read as a modified model rather than a pivot, serving as a reminder to Washington that Abu Dhabi’s cooperation should not be taken for granted.
What does the exit mean for OPEC itself? The losses are high and may exist in the medium term. The UAE was the cartel’s third-largest producer, accounting for 12 percent of OPEC’s total supply before the crisis. Angola left in 2024 due to conflicts of interest. Qatar exited in 2019. Each exit was planned as idiosyncratic; the aggregated structure is a group blocked from within by the same forces of strategic differences that have now claimed Abu Dhabi. Saudi Arabia retains OPEC’s institutional architecture and the political will to lead it, but managing a small, underpowered organization during a period of historic supply disruptions will be difficult to say the least. Riyadh will be leading the structurally weak OPEC forward.
The Iran war has not united the Gulf. Instead, it has divided it on the basis of existing faults: accelerating apparent differences in Yemen policy, economic competition, and different calculations about how to manage relations with Washington and Tehran. The divide is reflected in the starkly different stances the Gulf states have taken toward Iran: Oman, which hosted the pre-war nuclear talks between the US and Iran and has been a staunch mediator in the region, has continued to call for diplomacy even as Iranian attacks hit its own territory. Qatar, which shares a large gas field with Iran and has historically paved the way for Tehran, has insisted on coexistence, with its foreign ministry. noting that the two countries “will be neighbors for the future of mankind.” Saudi Arabia, despite withstanding Iran’s attacks, has also signaled a preference for deceleration, fearing a war that threatens its economic transformation agenda.
Only the United Arab Emirates has laid out that hard line, demanding reparations, the unconditional reopening of the Strait of Hormuz, and the restoration of all Iranian power. OPEC’s departure is the result of a geopolitical posture that now isolates Abu Dhabi not only from Riyadh but from the wider Gulf accord. The UAE has concluded that its interests are best served by acting as an independent actor rather than as a member of a company. Whether that calculation proves correct depends on how the war ends and what regional architecture emerges from it. One thing that OPEC’s decision makes unmistakably clear is that the old Gulf agreement, built on collective institutions and myths of common interests, is over.
