UAE quits OPEC, freeing 1.35 million bpd of suppressed capacity
By Harvey Rowlinson, Founder and Director, Purely Energy
Published 25 May 2026
The UAE formally ended its nearly 60-year OPEC membership on 01/05/2025, freeing it to raise production toward **4.85 million barrels per day** and beyond, in what a senior presidential adviser described as a race to monetise reserves before hydrocarbon demand structurally declines.
The UAE's exit removes a member whose production capacity of 4.85 million barrels per day (bpd) was being held to an OPEC+ quota of roughly 3.5 million bpd. That gap, 1.35 million bpd of suppressed output, is now available to release. ADNOC has a stated target of 5 million bpd by 2027, and the exit from OPEC and the broader OPEC+ alliance clears the institutional constraint on getting there.
Anwar Gargash, adviser to UAE President Sheikh Mohamed bin Zayed Al Nahyan, framed the decision in blunt terms: the world is entering the 'autumn of the hydrocarbon age', and the UAE intends to maximise revenue while demand and prices still support it. That logic, prioritising volume over cartel discipline, runs directly counter to Saudi Arabia's long-standing preference for managed supply and price floors. Relations between Riyadh and Abu Dhabi have been visibly strained this year, including proxy confrontation in Yemen, and the OPEC departure formalises what had become a substantive policy divergence.
What this means for UK oil-indexed energy contracts
Brent's path over recent months shows the curve into which this additional UAE capacity would eventually land.
Wholesale market chart
Brent Crude
Last 7 days, settlement data
92.83USD/bbl
−2.2% over 7 days
Why this window: Last 7 days — 6.9% range, 2.2% net move lower. Tight window picked so the week's price action is visible.
In the near term, Iran's effective closure of the Strait of Hormuz is offsetting the bearish signal: UAE barrels cannot reach market in volume while the strait is disrupted, so Brent has not yet priced in the full supply consequence. The medium-term picture is different. Once Hormuz stabilises, OPEC's collective ability to defend a price floor is materially weaker without UAE participation and compliance.
For UK commercial buyers, oil-indexed exposure tends to surface in:
- Transport and logistics fuel contracts linked to Brent crude
- Some legacy electricity supply contracts with oil-indexed pass-through clauses
- Industrial process gas contracts in sectors where oil parity pricing still applies
- Carbon allowance valuations under the UK Emissions Trading Scheme (UK ETS), which track fossil fuel price expectations over time
- Hedging positions on multi-year fixed deals signed when Brent was materially higher
ADNOC CEO Sultan al-Jaber stated the UAE will act as 'a responsible and stabilising force in energy markets', but the structural incentive now points firmly toward volume growth. If Riyadh responds by defending market share rather than price, a sustained softening of the forward oil curve becomes the base case rather than a tail risk.
Watch the Strait of Hormuz situation and any Saudi response on quota discipline: those two variables will determine how quickly the additional UAE supply reaches the physical market and re-prices the Brent forward curve that underpins oil-linked UK contracts.
How we produced this article
This article was AI-drafted from public market reporting by Harvey Rowlinson on 25 May 2026. It is scheduled for its next review on 25 May 2027.
Sources
- The UAE exited OPEC to increase its oil production as the end of the oil era approaches., Reuters (accessed 25 May 2026)
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