India is unlikely to reap immediate gains from Abu Dhabi’s OPEC exit due to the Strait of Hormuz closure limiting export capacity, butt stands to benefit in the long term through increased crude and LPG flows and expanded strategic petroleum reserves.
Prashant Vasisht, Senior V-P & Co-Group Head Corporate Ratings at ICRA, told businessline: “Timing is critical. In 2025, trade wars and other issues impacted earnings of producers such as Saudi Arabia and the UAE and 2026 started with the largest oil and gas disruption in history. The UAE intends to protect and expand its market share. They are coming out of tough times and want to ensure their market share does not come down further.”
Production plan
Besides, the UAE has aggressive plans to raise oil production to 5 million barrels per day (mb/d) by 2027. It’s their strategy to position themselves to play a key role in energy markets, particularly Asia and India. For India, this can be a positive considering the geographical proximity to the UAE, he added.
Global real time data and analytics provider Kpler said that in the near to short term, a potential UAE exit from OPEC is unlikely to translate into any incremental crude supply to the market or India, primarily due to ongoing export constraints rather than production policy.
Sumit Ritolia, Kpler’s Lead Research Analyst for Refining & Modeling, said that currently a significant share of UAE’s crude exports are routed via the Abu Dhabi Crude Oil Pipeline (Habshan–Fujairah pipeline), which bypasses the SoH.
“Our estimates suggest that this pipeline is already operating at or near capacity (around 1.8 mb/d), with flows in April running close to roughly 2-2.1 mb/d. Pre-disruption, the UAE was exporting around 3.3–3.4 mb/d of crude, but this has now fallen to around 2–2.1 mb/d, largely due to constrained export routes. As a result, the lack of incremental export capacity under current conditions (effectively a constrained/blocked Strait scenario) limits any immediate upside in supply. Therefore, OPEC exit does not materially change near-term supply availability for India,” he explained.
Over the longer term, however, the outlook is more constructive. The UAE has been steadily expanding upstream capacity and, outside OPEC constraints, could raise production (need to see if this happens), he said.
“At the same time, energy ties with India continue to deepen, supported by strategic engagement and growing cooperation with ADNOC. This creates scope for higher crude flows to India, as well as expansion of strategic petroleum reserve (SPR) arrangements, building on existing ADNOC storage agreements,” Ritolia anticipated.
Norbert Rücker, Head of Economics & Next Generation Research at Julius Baer, said that OPEC is anything but a cohesive group, and its policy making track record over the past years is streaked.
Tectonic shifts
“The petro-nations’ challenge is not the UAE exit but the tectonic shifts in the oil market more broadly. (The) US shale oil, South American deepwater oil, or Chinese plug-in cars all illustrate the new oil market setting of stagnation and greater competition. The UAE’s exit from OPEC matches our longer-term view on the oil market, where ample supplies and greater competition anchor prices in the high $60s,” he added.
Karen E Young, Senior Research Scholar at the Centre on Global Energy Policy, said, “The Emirati’s OPEC announcement seems to be part of a broader energy strategy to be able to move volumes and products (oil, gas, renewables) when and how they see fit and to prepare themselves for a new era of global energy security conflict and partnerships. New announcements that UAE state-owned oil company ADNOC/ XRG is planning to invest in a US gas business can also be read in this light.”
A trade source opined that UAE’s exit also points to the growing division inside OPEC and is likely to challenge the cartel’s production coordination and influence over crude oil prices.
Published on April 29, 2026