The UAE’s decision to quit OPEC did not have an immediate impact on oil prices, but dealt a major blow to the cartel. Abu Dhabi argued the move would allow it to act more independently in its “long-term strategic and economic vision.” After it officially exits on May 1, it will be free to set its own production limits and rid itself of Saudi Arabia’s de facto leadership of the group.

“Countries leave OPEC when the cost of compliance — in forgone production, revenue, and investment — exceeds whatever benefit membership provides,” independent energy commentator Wael Mahdi wrote in a column for Semafor. “Countries with cheap extraction costs, massive reserves, and diversified economies,” like the UAE, “can increasingly afford to go it alone.”

Though energy markets have largely downplayed the immediate impact, focusing instead on the closure of the Strait of Hormuz, analysts argued that a muted reaction could also point to OPEC’s diminishing relevance to global oil markets. In the longer term, the UAE’s capacity to produce more oil and release it onto the market could, meanwhile, bring down global oil prices, Russia’s finance minister said.