LIVE MARKETS-How UAE move will affect oil prices

ReutersMay 1, 2026 11:03 AM

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HOW UAE MOVE WILL AFFECT OIL PRICES

The immediate impact on oil prices from the UAE's exit from OPEC is likely be limited, since any meaningful increase in output would still depend on extra barrels being shipped through the Strait of Hormuz.

However, the United Arab Emirates’ move could ultimately change the game for energy prices.

"The UAE is OPEC’s third-largest producer and accounts for the second-largest share of spare capacity, around 25% of the total," notes Arend Kapteyn, economist at UBS.

“A number of significant projects had been scheduled to come on stream, potentially lifting UAE crude output from around 3.6 mb/d day pre-conflict to close to 5 mb/d by 2029.”

The United Arab Emirates on Tuesday said it was quitting OPEC as an unprecedented energy crisis caused by the Iran war exposes discord among Gulf nations.

“The UAE’s announcement will reduce the group’s (OPEC's) share of global crude production from around 36.6% to roughly 32.5%, its lowest level since 1988,” Kapteyn says.

“The steady erosion of OPEC’s share of global oil supply will complicate the group’s ability to manage market balances,” he adds, arguing that over time, this is likely to increase price volatility.

(Stefano Rebaudo)

EARLIER ON LIVE MARKETS:

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TRADE IDEAS FOR A LONG-LASTING HORMUZ DISRUPTION CLICK HERE

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