After significant and unprecedented wartime defence spending, economic disruption, and commercial losses, the UAE intends to maximise oil revenue by leaving OPEC. In the longer term, Abu Dhabi views oil as a fading asset whose use will become insignificant, if not irrelevant, in the decades to come. Looking to the future, it seeks to monetise reserves before they become stranded assets, with the motto of “use it or lose it”.
On 27 April, Emirati political analyst and social media influencer Amjad Taha told his nearly 680,000 followers on X that “tomorrow will be a historic day” in the UAE. A key adviser to President Mohammed bin Zayed Al Nahyan (MBZ), Taha is regarded as both an insider in Abu Dhabi‘s policymaking circles and an unofficial purveyor of Emirati narratives to international audiences. His message stoked a buzz of anticipation among geopolitical watchers, amid a fragile three-week-old U.S.-Iran ceasefire and broader Middle Eastern volatility.
Taha did not disappoint. The following day, the UAE announced its departure from the Organization of the Petroleum Exporting Countries (OPEC), effective 1 May. The move removed the cartel’s fourth-largest oil producer, responsible for 15% of OPEC’s total capacity, and one of its most disciplined members. Membership of nearly six decades in the energy bloc, predating the UAE’s 1971 independence from the UK, was terminated via a brief press release from the official Emirates News Agency. Energy Minister Suhail Al Mazrouei elaborated on the decision in interviews with global media, framed around Abu Dhabi’s evolving national interests and its assessment of shifting global energy demand — both short-term, war-driven trends and longer-term structural transitions.
The seemingly abrupt exit surprised some observers, who were inclined to characterise it as a knee-jerk reaction to war-induced Strait of Hormuz bottlenecks. Yet a closer examination reveals that Abu Dhabi had long resented OPEC-imposed production caps of 3–3.5 million barrels per day, intended to keep global prices high since the U.S. shale boom of the mid-2010s. Over the past 15 years, the state-owned Abu Dhabi National Oil Company (ADNOC) has modernised and expanded infrastructure to allow potential output of 4.5–5 million barrels per day. Mazrouei insists that these figures could be raised to 6 million if necessary.
With at least one million barrels per day of untapped output and growing, the UAE has emerged to possess OPEC’s second largest spare capacity, trailing only Saudi Arabia. In this context, in 2025, Abu Dhabi’s capacity utilisation was 66%, down from 73% in 2021 and well below Saudi Arabia’s 77% and Kuwait’s 84%. According to budgetary officials, these OPEC’s restrictions represented roughly $50 billion in annual lost revenue, a figure set to only rise as long as the country remains in the oil producers’ bloc.
Abu Dhabi’s frustration was compounded by the 2016 OPEC+ framework with Russia and other non-OPEC allies, an arrangement it increasingly viewed as disadvantageous. During recent geopolitical shocks such as the COVID-19 pandemic and the Russia–Ukraine War, the UAE concluded that OPEC+ responses appeared to favour Russia and Saudi Arabia’s narrow interests rather than provide broad and equitable benefits to all member states. In this growing climate of dismay, Abu Dhabi saw a departure from the bloc as a question not of “if” but “when”, while using the threat as a bargaining chip to secure higher production quotas.
The Iran war provided the timing. Tehran’s attacks on commercial shipping in the Gulf, coupled with attempts to impose an extortionist toll-booth system, reduced petroleum exports to a trickle. The UAE promptly rerouted some oil via the Fujairah pipeline to its Indian Ocean port. That route, however, can currently handle only 1.8 million barrels per day at most, spurring the UAE to accelerate long-term infrastructure development to bypass the strait. While expanding alternative transport options, Abu Dhabi is simultaneously preparing for the restoration of pre-war maritime traffic, whether through diplomacy or U.S. security guarantees, and by leaving Opec, it seeks to exploit surplus capacity without its constraints.
After significant and unprecedented wartime defence spending, economic disruption, and commercial losses, the UAE is unwilling to fund costs by extensively drawing on its sovereign wealth fund. Instead, it intends to maximise oil revenue independently of the cartel. Thanks to decades-long economic diversification into finance and tourism, Abu Dhabi can balance its budget as long as global oil prices are above $49 per barrel, compared with Saudi Arabia’s $90 per barrel break-even point. This dynamic reduces any Emirati apprehensions that increased production and consequentially lower global prices would cancel out surplus revenue.
The decision reflects a broader UAE adoption of a unilateralist and assertive foreign policy. Abu Dhabi traditionally aligned with Saudi Arabia and other moderate Sunni states to counter radical Islamist influences, exemplified by the concerted diplomatic campaign against Qatar and joint offensives against the Iran-backed Houthis in late 2010s. Yet in recent years the UAE has increasingly acted independently, in support of what it perceives as unique national interests: normalising relations with Israel via the Abraham Accords, backing the Rapid Support Forces (RSF) in the Sudanese Civil War, and supporting an offensive by southern Yemeni separatists in December 2025 against a Riyadh-aligned government.
Divergence from common-stance Arab policy in the Iran War was a critical factor in leaving OPEC. Abu Dhabi criticised pan-Arab mechanisms, such as the Gulf Cooperation Council (GCC) and Arab League, as ineffective in countering Iranian aggression, signalling a willingness to act outside of a supposed regional consensus. Abu Dhabi reportedly conducted retaliatory airstrikes and deployed Israeli air-defence systems. Leaving an economic alliance that includes the Islamic Republic — and which has not sanctioned it for belligerence against fellow members — dovetails with Abu Dhabi’s increasing readiness to confront Tehran rather than accommodate it. Abu Dhabi’s sought-after measures outside of OPEC to lower global oil prices, coupled with a contemplatedfreeze of Iranian assets in the UAE, can be viewed as a continuation of the war by economic means.
The UAE’s newfound attempts to influence crude prices can also be seen as a lifeline to U.S. President Donald Trump in mitigating domestic political and economic fallout from the Iran War, especially ahead of Congressional elections in November. Having accused OPEC+ of artificially suppressing prices and harming Americans’ cost of living, Trump may reward Abu Dhabi for its decision, such as through a planned currency swap mechanism to select Gulf countries harmed by Iranian projectiles. The exit more broadly reinforces the UAE’s position as an ironclad U.S. ally in an era of heightening geopolitical polarisation, building on its inclusion in Washington’s “Pax Silica” initiative for securing AI, semiconductor and critical mineral supply chains and the proposed IMEC trade corridor.
In the longer term, Abu Dhabi views oil as a fading commodity whose use will become insignificant, if not irrelevant, in the decades to come. MBZ and his advisers foresee falling global consumption as developed economies electrify transport systems, energy grids and modern comforts. It has tentatively set 2050 as its target date for achieving net-zero. China has already trimmed domestic demand by one million barrels per day through extensive rail network and vehicle electrification. The Iran War exposed oil’s vulnerability to geopolitical shocks and state extortion, reinforcing the rationale for diversification. Abu Dhabi aims to monetise reserves before they become stranded assets, with the motto of “use it or lose it”.Yousef Al-Otaiba, the UAE Ambassador to the U.S., articulated this post-petrostate perspective in a Financial Times column. Drawing on his father Mana’s role as a multi-term OPEC president, Al-Otaiba insisted that membership was always a means to an end, with an eventual expiration date: valuable when the UAE relied on hydrocarbons and sought alliances as a young state. As the seven-emirate federation pursues a knowledge-based economy with a focus on renewables, OPEC membership has become increasingly perceived as a losing proposition. The Iran War merely accelerated an inevitable transition, marking yet another step in the UAE’s maturation into a state willing to chart its destiny on its own terms.