The decision of the United Arab Emirates (UAE) to withdraw from OPEC and OPEC+ has created a stir in energy markets around the world. This has happened at a time when the Iran war has already disrupted the supply chain and increased prices. For years, this cartel of oil producers has acted as a force aimed at influencing production and keeping prices stable. Now there is new pressure on this structure.
Amidst this turmoil, this move has given US President Donald Trump an unexpected geopolitical advantage. The exit of UAE will weaken the world’s largest oil cartel. Which US President Donald Trump had been wanting for a long time. This disintegration of OPEC can significantly strengthen America’s position in reshaping the global oil market. There is a reason for that too.
In the last decade, America has been playing the role of not only importer but also exporter in the oil market. In such a situation, America’s role in controlling oil prices may become even more important. Let us discuss in detail the circumstances after UAE’s departure from OPEC.
How will Trump become stronger if OPEC unity weakens?
Trump has long been a vocal critic of OPEC. He has accused OPEC of deliberately keeping prices high by manipulating the oil markets. He has repeatedly argued that the organization is “robbing the rest of the world” by raising prices. The UAE’s exit will directly strengthen this viewpoint by exposing the group’s internal differences.
OPEC has traditionally demonstrated unity despite differences over production quotas and geopolitical tensions. The exit of an important member like UAE will tarnish this image and raise questions on the group’s ability to work together.
For Trump, this is validation of his vision. A divided OPEC will be less able to coordinate supply cuts, sending prices higher. This is in line with Trump’s big target under which he wants to keep energy prices under control around the world.
A divided cartel would give America more power
UAE is not a common member. It is one of OPEC’s most influential producers and a major exporter of energy. Its exit would weaken the bargaining power of the organization and reduce its ability to enforce production discipline among the remaining members. This will give America an opportunity to have a greater impact on the flow of oil around the world.
Trump has also linked US military security in the Gulf region to energy-related consequences. He says OPEC members take advantage of American protection while they keep oil prices high. By separating from this grouping, the UAE is also signaling its willingness to reconsider old alliances. This could open the door to greater coordination with Washington on energy strategy.
Is UAE’s move right during Iran war?
The timing of this step makes it even more important. There is tension on the ‘Strait of Hormuz’ due to Iran conflict. An important sea route is being affected due to disruptions in the movement of ships, through which about one-fifth of the world’s oil and gas supply passes. OPEC producers are already facing a lot of difficulties in sending their exports through this sea route. In such a delicate environment, unity among oil producers is very important. Instead, the separation of the UAE will increase uncertainty and fragmentation. For Trump, this fragmentation would reduce the risk of any mixed reaction from oil exporters that could counter US strategies in the region.
After all, what is UAE’s resentment?
UAE’s decision is also based on dissatisfaction with regional partners. Anwar Gargash, diplomatic advisor to the UAE President, criticized the response of Arab and Gulf countries to the Iranian attacks. He said that the Gulf Cooperation Council (GCC) countries supported each other logistically, but politically and militarily, I think historically they have been in the weakest position.
He further said that I expected this weak attitude from the Arab League and I was not surprised by it, but I did not expect this from the (Gulf) Cooperation Council and I was surprised by it. These comments point to deep rifts within regional alliances. For Trump, such divisions make it easier to deal with countries individually rather than confronting a united bloc.
Can crude oil become cheaper?
A weak OPEC may find it difficult to effectively implement production cuts. If member countries start acting independently, global supply could increase or at least control over it could be reduced. This may reduce the upward pressure on oil prices.
Low or stable prices would be politically beneficial for Trump, especially amid concerns about inflation and economic stability. The cost of energy remains an important issue for both voters and markets.
strategic advantage beyond oil
Its effects will extend beyond energy markets. UAE is a close partner of America and a major economic center in the region. Its decision to withdraw from OPEC signals a comprehensive reorganization of alliances, which may more closely align with America’s interests. At a time when Washington is dealing with a complex conflict with Iran, the exit of a key Gulf partner from the traditionally coordinated oil bloc adds strategic flexibility.
crude oil
Can UAE’s decision shift the balance?
UAE’s exit from OPEC is not just an organizational change. This is an indication of how global energy politics may evolve in the coming months. For Trump, it is a rare combination of economic and geopolitical advantages. A divided OPEC, strained regional alliances and disrupted energy flows—all combine to tilt the balance slightly in Washington’s favor. In the midst of a war and a volatile oil market, this advantage could prove vital.
What is OPEC, and when did UAE join this group?
Established at a conference in Baghdad, Iraq in September 1960, OPEC was originally created by five founding members – Iran, Kuwait, Iraq, Saudi Arabia and Venezuela. Before its formation, Western multinational oil companies (often referred to as the ‘Seven Sisters’) largely determined the prices paid to oil-producing countries. Created to counter this dominance, OPEC’s main objective was to coordinate the petroleum policies of its member countries to ensure that they received stable and fair returns for their products.
UAE formally joined this alliance in 1967. This was six years before the OPEC oil embargo was imposed on countries like America and the Netherlands for supporting Israel in the Arab-Israeli War. During this period, oil prices almost quadrupled, resulting in OPEC gradually gaining more power geopolitically, and also expanded its membership to countries such as Algeria and Nigeria.
In 2016, a broader alliance called OPEC+ was formed, which included 10 major oil producing countries outside OPEC (led by Russia). Formed as a response to America’s rapidly expanding ‘shale oil’ production, OPEC+ produces about 40 percent of the world’s crude oil, and according to the US Energy Information Administration (EIA), it accounts for 60 percent of international petroleum trade.
UAE faced many challenges
Apart from war, UAE had reasons for leaving this group. Historically, the country has seen its production limits limited to only a portion of its total capacity. The UAE’s energy minister, Suhail al-Mazrouei, told Reuters that careful consideration of current and future policies related to production levels prompted the decision to leave the group.
Backed by a $150 billion investment, state-owned Abu Dhabi National Oil Company (ADNOC) aims to increase the country’s maximum sustainable crude oil production to five million barrels per day by 2027. Due to OPEC’s strict quota rules, the UAE was underutilizing both its infrastructure and natural reserves. To diversify its economy, the UAE has expanded into sectors such as education and tech, in the hope of attracting (and retaining) top talent from around the world.
How much oil reserve does UAE have?
UAE’s withdrawal from the Organization of Petroleum Exporting Countries (OPEC) and OPEC+ is of great importance in the oil market. There is a reason for this also. UAE currently has a lot of oil reserves. Talking about the figures, according to Abu Dhabi National Oil Company (ADNOC), UAE has proven reserves of 120 billion barrels, which makes it sixth at the global level. This country is also the third largest producer within OPEC. According to OPEC data from February, before the Iran war started, the UAE was producing about 3.4 million barrels of oil per day, which was about 4 percent of global production. Later, in March—the first month of the war—production dropped to 1.9 million barrels per day, largely due to disruptions to shipping through the Strait of Hormuz.
