UAE exit from OPEC+ may weaken group’s long-term market role, analyst says

(WO) - The United Arab Emirates’ decision to leave OPEC and the broader OPEC+ alliance could reshape the group’s long-term influence on global oil markets, though near-term supply dynamics remain largely unchanged, according to analyst commentary.

Tamas Varga of PVM Oil Associates described the move as a “seismic change,” noting the UAE’s significant spare production capacity of about 5 MMbopd, compared with its previous OPEC quota of roughly 3.4 MMbopd.

Despite the scale of the decision, Varga said the immediate impact on oil supply is limited by ongoing disruptions tied to the Iranian conflict and the continued restriction of flows through the Strait of Hormuz.

“Even if the UAE’s increased production finds a way to ship… there will still be around 10 MMbpd stranded on the ‘wrong’ side from Gulf producers,” he said.

Over the longer term, however, the UAE’s departure could weaken OPEC+ cohesion and reduce its ability to act as a swing producer, as the group potentially loses both market share and spare capacity.

The decision had little immediate impact on crude market direction, with crude prices rising more than $3/bbl on the day, while refined products—particularly distillates—faced downward pressure.

Separately, signs of easing product markets emerged as Chinese state oil companies moved to increase refined product exports amid weak domestic demand, a development that could help offset tightness in Asian markets despite continued constraints at Hormuz.