{"id":116245,"date":"2026-04-29T00:00:00","date_gmt":"2026-04-29T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/?p=116245"},"modified":"2026-04-29T02:41:57","modified_gmt":"2026-04-29T02:41:57","slug":"uae-exits-opec-to-prioritize-capacity-over-quotas","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2026\/04\/29\/uae-exits-opec-to-prioritize-capacity-over-quotas\/","title":{"rendered":"UAE exits Opec to prioritize capacity over quotas"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong>The UAE\u2019s exit from Opec and Opec+ has been a<\/strong><strong> long time coming<\/strong>, analysts tell us, but it comes at a critical time, with oil markets heavily disrupted and the UAE\u2019s economy under unexpected pressure due to the regional war. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The UAE \u2014 an Opec+ founding member of nearly 60 years \u2014 has long had differences with the cartel over restrictive<\/strong><strong> production quotas<\/strong> that have kept it from producing at its full capacity. \u201cThe outcome has likely long been in the making,\u201d global oil markets strategist and former head of research at Onyx group Harry Tchilinguirian tells us. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>\u201cThe UAE needed to unshackle its output from a quota system<\/strong> \u2014 not only for the good of its flagship Murban futures contract, but also for its longer-term economic development, using oil revenues to finance its longer-term transition,\u201d Tchilinguirian says. This is despite Opec making a shift towards capacity-based quotas, which were <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/uae\/2025\/12\/08\/opecs-new-capacity-audit-explained\/\" style=\"\">designed<\/a> to better align targets with real production. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The change to its quota strategy \u2014 and recent <\/strong><strong><a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/uae\/2025\/08\/04\/this-morning-opec-hikes-production-for-september-unwinding-production-cuts-dubai-ras-al-khaimah-see-6-y-o-y-increase-in-tourists-in-1h\/\" style=\"\">quota hikes<\/a><\/strong><strong> \u2014 were more like a bandaid than a real solution.<\/strong> \u201cIn previous Opec meetings, agreed upward changes with Saudi Arabia to the UAE\u2019s production baseline level and quota were a short-term fix to a larger, long-term issue \u2014 namely, the UAE\u2019s expanding production capacity to provide the necessary liquidity for the physically deliverable IFAD Murban futures contract,\u201d he adds. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The keyword, \u201cflexibility,\u201d is right there in the UAE\u2019s <\/strong><strong><a target=\"_blank\" href=\"https:\/\/www.wam.ae\/en\/article\/bzxzuh7-uae-announces-decision-exit-opec-opec%2B\" style=\"\">statement<\/a><\/strong><strong> on the news. <\/strong>\u201cThe decision reflects a policy-driven evolution in the UAE\u2019s approach, enhancing flexibility to respond to market dynamics while continuing to contribute to stability in a measured and responsible manner,\u201d the statement said. No matter what Opec\u2019s quota was based on, it was a quota \u2014 a restriction that prevented the UAE from turning its taps on or off (or ramping up production) whenever it needed to. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>IN CONTEXT- <\/strong>The UAE had been planning to grow its production capacity to 5 mn bbl \/ d by 2027, up from 4.85 mn today. It\u2019s also among several countries who have had to compensate for overproduction, with the country recently committing to a stepped series of make-up cuts from October 2025 through June 2026 to offset barrels produced above its Opec+ quota. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>That flexibility is needed now more than ever: <\/strong>The UAE\u2019s economy was forecast to be the fastest growing in the GCC this year, and now it\u2019s expected by many to either stagnate or shrink in 2026 due to the impact of the war on the non-oil sector and oil market disruptions.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>\u201c<\/strong><strong>Greater output flexibility may help offset slowdowns in sectors such as tourism, trade, <\/strong><strong>and real estate<\/strong>, while maximizing hydrocarbon revenues and capitalizing on market-disruption<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">[windows] after the strait is fully open,\u201d MENA economist <a target=\"_blank\" href=\"https:\/\/ent.news\/2026\/4\/1459.pdf\" style=\"\">Hamzeh Al Gaaod wrote in a note (pdf)<\/a><a target=\"_blank\" href=\"https:\/\/ent.news\/2026\/4\/1459.pdf\" style=\"\"><\/a> shared with EnterpriseAM.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Right now, disruptions mean that the UAE is only exporting about half of its<\/strong><strong> production<\/strong>, so the move is unlikely to lead to any changes in the near term until the Strait blockade ends. But once it does, \u201cheadline GDP growth rates will be shifted substantially higher, further improving metrics like fiscal balances (which are in surplus anyway),\u201d Emirates NBD\u2019s Chief Economist and Head of Research Edward Bell. <\/p>\n<p class=\"tag-border-left\">Let\u2019s be clear about what \u201cunder pressure\u201d really means <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The UAE has plenty of liquidity<\/strong> \u2014 S&P Global estimates liquid assets amounting to about 211% of GDP \u2014 but the bigger problem, as we\u2019ve been saying time and time again, is what the disruption and the hit to its \u201csafe haven\u201d image will do to its non-oil sector. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>\u201c<\/strong><strong>Recent indications of capital outflows and a slowdown related to the war create a need <\/strong><strong>for financial injections<\/strong>,\u201d Al Gaood writes. \u201cThis is evident in rising debt issuance, government support measures, and reported discussions of potential external financial arrangements (e.g., a Fed swap line),\u201d he adds. \u201cHigher oil production could directly sustain fiscal capacity and support private-sector activity.\u201d<\/p>\n<p class=\"tag-border-left\">This is also about its energy strategy and AI ambitions <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The UAE has been saying for a while now that the world needs to invest much more in<\/strong><strong> energy. <\/strong>Adnoc CEO and Industry and Advanced Technology Minister Sultan Al Jaber <a target=\"_blank\" href=\"https:\/\/x.com\/SultanAlJaber\/status\/2049125387503054942?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E2049125387503054942%7Ctwgr%5E576e016facad2e2a0e17ed9d22c4e35b34726133%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.thenationalnews.com%2Fbusiness%2F2026%2F04%2F28%2Fuae-announces-it-will-leave-opec%2F\" style=\"\">said it<\/a> again yesterday: \u201cAt Adnoc, our focus is unchanged: meeting the growing energy needs of our customers and partners around the world with reliability, responsibility, and the ambition to deliver more\u2026 across oil, gas, chemicals, and low carbon and renewable energy.\u201d <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Al Jaber has said it many times before: <\/strong>The data center and AI boom that\u2019s coming is going to need more energy \u2014 and a lot of it. So as policymakers fight about fossil fuels and renewables, the UAE has been pulling on one thread and one thread only: The world is going to need more energy, not less, and demand is going nowhere. He said at Adipec last November that oil consumption is expected to remain above 100 mn bbl \/ d beyond 2040, while LNG demand is projected to rise by 50%.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>\u201cWe believe the world is currently undersupplied,\u201d <\/strong>Energy Minister Suhail Al Mazrouei said in an interview with CNBC (<a target=\"_blank\" href=\"https:\/\/www.cnbc.com\/video\/2026\/04\/28\/uae-minister-explains-decision-to-leave-opec-as-hormuz-crisis-deepens.html\" style=\"\">watch, runtime: 08:55<\/a>). \u201cThis situation would require agility, and someone to move quickly,\u201d he added.<\/p>\n<p class=\"tag-border-left\">Officials also want you to know what it\u2019s not about\u2026 <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>\u201cThis has nothing to do with any of our brothers and friends within the group<\/strong>\u2026 We have the highest respect for the Saudis for leading Opec,\u201d Al Mazrouei also said. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The UAE chose now to make the announcement to avoid a severe impact on oil prices<\/strong><strong> and on Opec cartel members<\/strong>, Al Mazrouei added, citing the closure of the Strait of Hormuz and the shortages it\u2019s leading to in the market. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>\u201cWe believe that having the freedom to take the decision, and acting as a responsible producer<\/strong> to do our part in balancing the market is something we can do better alone than as part of a group,\u201d he explained. <\/p>\n<p class=\"tag-border-left\">What the move means for Opec <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Mechanically, the exit removes 3-4 mn bbl \/ d of swing capacity<\/strong>, the ability to respond when Hormuz closes or pipelines rupture, Wolfgang Lehmacher, former head of supply chain and transport industries at the World Economic Forum tells EnterpriseAM. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Meanwhile, the rest of the group looks thinner where it counts:<\/strong> Iran and Iraq have little meaningful spare capacity \u2014 which means Opec\u2019s ability to smooth supply imbalances is directly weakened without the UAE in the mix, Carnegie\u2019s Sergey Vakulenko told <a target=\"_blank\" href=\"https:\/\/www.reuters.com\/business\/energy\/view-uae-leave-opec-opec-oil-producer-groups-2026-04-28\/\" style=\"\">Reuters<\/a>.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Reality check: <\/strong>\u201cMost participants lack excess capacity and need pooled coordination as protection against volatility they cannot absorb individually,\u201d Lehmacher notes.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>And the volatility question is now front and center:<\/strong> A structurally weaker Opec points to a potentially more volatile oil market once current disruptions ease, as the group\u2019s ability to manage supply diminishes, Rystad Energy\u2019s Jorge Leon told Reuters. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The problem for Opec is if the move triggers a \u201cfurther disintegration of the group<\/strong>,\u201d Capital Economics\u2019 Chief Climate and Commodities Economist David Oxley writes in a note seen by EnterpriseAM. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>\u201cIf other producers begin prioritizing market share over quota discipline<\/strong>, Opec\u2019s ability to manage orderly markets through coordinated supply adjustments may increasingly be called into question,\u201d Ole Hansen, head of commodity strategy at Saxo Bank, said in a research note seen by EnterpriseAM. If discipline erodes too far, the group\u2019s capacity to shape the market shifts from enforcement to mere signaling.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The next phase of the oil market may be less about coordination and more about <\/strong><strong>competition: <\/strong>Monitor how the UAE manages its production \u2014 and whether Saudi Arabia adjusts its strategy to compensate.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Near-term impact will likely be minimal given ongoing disruptions, but long-term? GDP growth could get a major boost<\/p>\n","protected":false},"author":1,"featured_media":116246,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2414],"tags":[7,266,384,2413,1397],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-116245","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-big-story-today","tag-enterpriseam-uae","tag-oil-and-gas","tag-opec","tag-the-big-story-today","tag-uae","wpautop","entry"],"acf":{"mongo_id":"f880f56c-85e3-4c8b-99d0-e5194d295dc4","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2026\/4\/1465.jpg","photo_position":"above","homepage_title":"","full_issue_title":"The big exit","related_issue":[116240],"teaser":"Near-term impact will likely be minimal given ongoing disruptions, but long-term? GDP growth could get a major boost"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>UAE exits Opec to prioritize capacity over quotas - UAE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/uae\/2026\/04\/29\/uae-exits-opec-to-prioritize-capacity-over-quotas\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UAE exits Opec to prioritize capacity over quotas\" \/>\n<meta property=\"og:description\" content=\"Near-term impact will likely be minimal given ongoing disruptions, but long-term? 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