UAE Withdraws from OPEC Effective May 1

This shift reduced OPEC+ combined production to about 59% of global output. The 2014 oil price drop, from over $100 per barrel to under $40 by 2016, tested OPEC's strategy. Saudi Arabia's decision not to cut production aimed to challenge U.S. shale, but American producers adapted, with breakeven costs falling from $76 per barrel in 2014.

The exit reflects deepening splits between the UAE and Saudi Arabia on diplomatic issues, including Yemen, Sudan, Pakistan, and Somaliland. The UAE has aligned more closely with U.S. positions, less threatened by American shale due to its economic diversification.

Current U.S. shale breakevens are around $60 per barrel. Oil markets showed no immediate reaction to the announcement, with focus on the closure of the Strait of Hormuz amid the U.S.-Israel war with Iran, which caused the biggest loss of oil supply on record, according to the World Bank.

Analysts note that OPEC's relevance has diminished, with members often failing to adhere to agreed production levels. Gabriella Hoffman, director of the Center for Energy and Conservation at Independent Women’s Forum, stated the UAE seeks growth without OPEC constraints.

“I think they said, ‘We’ve had enough. We can grow without OPEC.'" — Gabriella Hoffman, director of the Center for Energy and Conservation at Independent Women’s Forum, April 30, 2026 (Just the News)”

Venezuela may follow the UAE out of OPEC if its opposition gains power, as the government of Delcy Rodriguez supports the cartel while the opposition does not. Such shifts could foster alliances in the Americas, though U.S. anti-trust laws prevent cartel-like restrictions on production.

Chris Weafer stated the exit signals OPEC's declining grip on oil markets. Maurizio Carulli, global energy analyst at Quilter Cheviot, noted that OPEC's influence on prices has varied, with enforcement challenges among members. The move aligns with U.S. preferences for lower oil prices to support consumer incomes and shale production, though balancing these with needs in Venezuela requires prices around $100 per barrel for investment.