The United Arab Emirates’ decision to leave OPEC after nearly six decades is both a political and economic manoeuvre, striking at the heart of Saudi Arabia’s leadership of the cartel and indirectly at Riyadh’s defence partner, Pakistan, according to report by NDTV.

While tensions between Abu Dhabi and Riyadh have been simmering for years, they were partially masked by their shared hostility towards Tehran following the US-Israel war on Iran. 

Yet the UAE’s frustration with Saudi Arabia’s insistence on limiting production, while it sought to expand output, proved decisive.

Analysts such as Firas Maksad of Eurasia Group have noted that the Emirates were unhappy at being constrained when they wanted to pump more oil, while Saudi Arabia pushed for restraint. This divergence in priorities exposed the fragility of OPEC’s cohesion.

At the same time, the UAE’s irritation extended to Pakistan, which it viewed as too closely aligned with Saudi Arabia and too timid in its mediation role between Washington and Tehran. Islamabad’s reluctance to hold Iran accountable for attacks on Gulf states during the war further deepened Abu Dhabi’s discontent.

Neil Quilliam of Chatham House observed that the UAE sees the current situation in stark terms, with no room for neutrality. From Abu Dhabi’s perspective, Pakistan’s mediating stance placed it in the middle ground, which was unacceptable at a time when the Emirates demanded clear alignment against Tehran. This frustration with Pakistan’s role added another layer to the UAE’s decision-making calculus.

By leaving OPEC, the UAE gains immediate freedom from Saudi-controlled quotas, enabling it to maximise production and profits in the face of constrained global supplies.

The move simultaneously undermines Saudi Arabia’s prestige and its ability to manage oil prices. It also positions Abu Dhabi closer to US President Donald Trump, a long-standing critic of OPEC, potentially opening avenues for diplomatic favour and investment benefits.

The announcement was made unilaterally, even as the Gulf Cooperation Council convened in Jeddah for an emergency session following Iranian attacks.

The UAE, politically closest to Israel and most hostile to Tehran, has borne the brunt of over 2,200 drone and missile strikes due to its geographical proximity. 

Yet despite privately urging Saudi Arabia and Qatar to launch joint counterattacks, Abu Dhabi found no consensus within the GCC. The absence of political solidarity prompted it to abandon economic solidarity, striking out on its own.

According to Adnoc, the UAE’s exit will allow crude production to rise from 3.4 million barrels per day before the war to 5 million barrels by 2027. This comes against the backdrop of Iran’s production collapse, with output slumping by 44 per cent to 1.9 million barrels in March after the closure of the Strait of Hormuz. Overall, OPEC’s production fell by 27 per cent that month, the steepest decline in decades.

Dr Ebtesam Al-Ketbi of the Emirates Policy Centre described the move as an act of self-interest, redefining the UAE’s role from a bloc producer to a balancing producer capable of directly influencing global supply dynamics. While this may weaken OPEC’s cohesion, it strengthens Abu Dhabi’s position as a flexible actor in the energy market.

The Pakistan factor looms large in this decision. Earlier in April, the UAE recalled $3.5 billion in deposits from Islamabad, representing a fifth of Pakistan’s foreign exchange reserves. This was widely interpreted as a signal of displeasure with Pakistan’s neutrality over Iran.

Saudi Arabia, which signed a defence pact with Pakistan in September, was forced to step in to support its South Asian partner. The rivalry between Riyadh and Abu Dhabi has long been evident, from disputes over Yemen’s civil war to diverging alliances, with Saudi Arabia more closely aligned with Pakistan, Turkey and Egypt, while the UAE invests heavily in India.

Quilliam noted that the UAE views the growing Saudi-Pakistan alliance as a direct conflict of interest. By leaving OPEC, Abu Dhabi hopes not only to secure US engagement but also to weaken the Saudi-Pakistan nexus.

India stands to benefit from this shift. The UAE’s determination to maximise output outside OPEC quotas will increase supply flexibility and lower price ceilings over time. For India, this translates into reduced import costs and diminished inflationary pressures. Sourav Mitra of Grant Thornton Bharat highlighted that the UAE’s exit is likely to soften crude prices, easing India’s import bill and inflation outlook.

The UAE’s departure from OPEC thus represents a multifaceted strategic move. It challenges Saudi Arabia’s leadership, signals disapproval of Pakistan’s neutrality, strengthens ties with Washington, and positions Abu Dhabi as a more independent and influential player in global energy markets.

NDTV