Crude oil futures traded lower on Wednesday morning following news of the UAE’s exit from OPEC (Organization of the Petroleum Exporting Countries) effective May 1.

At 9.11 am on Wednesday, July Brent oil futures were at $104.02, down by 0.36 per cent, and June crude oil futures on WTI (West Texas Intermediate) were at $99.32, down by 0.61 per cent.

May crude oil futures were trading at ₹9417 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹9485, down by 0.72 per cent, and June futures were trading at ₹8985 against the previous close of ₹9026, down by 0.45 per cent.

In their Commodities Feed for Wednesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said the UAE’s exit from OPEC is a significant move and will be a big blow to OPEC. It’s the highest-profile exit from OPEC in recent years.

Prior to the Iran war, the UAE was pumping 3.4 million barrels a day of crude oil (February 2026), making up around 12 per cent of total OPEC output and the third-largest producer within the group. The UAE’s departure will reduce OPEC’s effectiveness in managing and influencing the global oil market through supply measures, they said.

The UAE’s exit will increase output, with current production capacity of around 4.85 million barrels a day and plans to reach 5 million barrels a day by 2027. However, before this can be tapped, there must be a resolution in the Persian Gulf that allows for uninhibited energy flows through the Strait of Hormuz once again.

“Therefore, in the short term, this development has little impact on the market. But in the medium to longer term, it means more supply for the market,” they said

The UAE has been increasingly frustrated over recent years by its output being constrained by OPEC production quotas, which have kept it well below its potential. In 2024, UAE crude oil production averaged 2.95 million barrels a day - well below capacity.

They said that the timing of the exit was planned well; announcing a departure during a period of significant supply disruption limits the market impact. Had this been announced any other time, we would likely have seen more downward pressure on oil prices.

In the near term, the biggest driver for oil prices remains developments in the Persian Gulf and the timing of a resumption in oil flows through the Strait of Hormuz.

“With no signs of an imminent restart in oil flows we have revised higher our oil forecasts for the remainder of the year. We now expect ICE Brent to average $104 a barrel in the second quarter of 2026 and $92 a barrel in fourth quarter of 2026,” they said.

Meanwhile, US President Donald Trump criticised Germany on the Iran issue. In a post on the social media platform Truth Social, Trump said: “The Chancellor of Germany, Friedrich Merz, thinks it’s OK for Iran to have a Nuclear Weapon. He doesn’t know what he’s talking about! If Iran had a Nuclear Weapon, the whole World would be held hostage. I am doing something with Iran, right now, that other Nations, or Presidents, should have done long ago. No wonder Germany is doing so poorly, both Economically, and otherwise!”

Published on April 29, 2026