The United Arab Emirates has announced it will leave OPEC and OPEC+ effective May 1, ending a membership that began in 1967—four years before the UAE was founded as a country. This signals a turning point in the UAE's role in global energy.

The government statement, published on state news agency WAM, cited a comprehensive review of the country's production policy and capacity as the basis for the move, calling it a reflection of “the UAE’s long-term strategic and economic vision and evolving energy profile.”

The decision, it said, is rooted in national interest and a commitment to meeting what it described as the market's “pressing needs,” a reference to global demand that the UAE believes is being underserved at a time of significant supply disruption.

The statement acknowledged the geopolitical backdrop—including an ongoing conflict with Iran that has severely restricted tanker movements through the Strait of Hormuz, the narrow waterway between Iran and Oman through which roughly a fifth of the world's crude oil and liquefied natural gas normally passes.

The US Energy Information Administration estimates that Iraq, Saudi Arabia, Kuwait, UAE, Qatar, and Bahrain shut in 7.5 million barrels per day of crude oil production in March, and 9.1 million barrels per day in April.

However, the statement framed the exit as policy-driven rather than reactive, noting that "underlying trends point to sustained growth in global energy demand over the medium to long term."

A Long-Running Dispute

Tuesday's announcement was not without precedent. In 2021, the UAE refused to endorse a production agreement to extend cuts to production unless its individual quota was raised, arguing that it had invested billions to expand capacity and was being unfairly constrained by figures set in 2018. A compromise was eventually reached, but the episode exposed a fundamental tension: The UAE wants to produce more, and OPEC's quota system was holding it back.

That ambition has only grown since. Abu Dhabi National Oil Company, a state-run entity, has a stated target of 5 million barrels per day by 2027, up from current production of around 3.4 million. Under the OPEC+ deal, the country has been held to roughly 3.2 million barrels per day while sitting on capacity above 4 million, a gap that made continued membership increasingly difficult to justify.

The UAE stressed that its exit does not signal a retreat from global energy responsibility. It pledged to bring additional production to market “in a gradual and measured manner, aligned with demand and market conditions,” and reaffirmed investment plans across oil, gas, renewables, and low-carbon technologies.

The statement noted that leaving OPEC would make the nation more flexible to respond to market dynamics; OPEC sets limits on production, meaning that the world's biggest producers often could supply and sell more oil than they actually do.

By limiting supply, the group is able to support prices. This mechanism primarily benefits producers that rely heavily on oil revenue, a description that fits Saudi Arabia far more than the UAE, whose non-oil economy now accounts for roughly 75 percent of GDP.

Market Reaction and Wider Implications

The immediate market response was sharp. Brent crude, the European benchmark, surpassed $100 per barrel for the first time since 8 April, rising to $111 as of writing.

The longer-term implications for OPEC are more consequential. The group has been under strain for months, with several members—including Iraq, Kazakhstan, and the UAE—having overproduced their quotas and being required to compensate. The UAE's departure strips the group of its third-largest producer at a time when supply dynamics are already fragile.

The exit follows Qatar's departure from the group in 2019 and comes as OPEC prepares for a meeting in Vienna, Austria, on Wednesday.

“The time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets,” the statement read.

The UAE said it values more than five decades of cooperation within OPEC and wished the organization success going forward.

This story originally appeared on WIRED Middle East.