Energy
UAE Jolts Global Oil Market, Quits OPEC, OPEC+
The United Arab Emirates (UAE) has withdrawn from the Organisation of the Petroleum Exporting Countries (OPEC) and the broader OPEC+ alliance.
The move marks a significant shift in global oil politics even as tensions in the Middle East continue unabated.
The decision, which will take effect from May 1, 2026, was disclosed in a statement issued on Tuesday by the UAE Ministry of Energy and Infrastructure, following what it described as a comprehensive review of its production strategy and future energy outlook.
Announcing the move, the ministry said the exit reflects the country’s evolving energy priorities and long-term economic vision.
The statement read, “The United Arab Emirates today announced its decision to exit the Organisation of the Petroleum Exporting Countries (OPEC and OPEC+), effective 1 May 2026. This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets.
“This decision follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs.”
The UAE, one of OPEC’s key producers, noted that the decision was anchored on national interest and its desire to respond more flexibly to changing market realities.
“The decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets,” the ministry added.
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The announcement comes against the backdrop of escalating geopolitical tensions in the region, particularly the ongoing Iran conflict, which has disrupted oil supply routes and heightened uncertainty in global energy markets.
Of particular concern is the Strait of Hormuz, a critical oil transit corridor through which a significant portion of the world’s crude supply passes. Recent threats and attacks linked to the crisis have raised fears of supply disruptions and price volatility.
The UAE acknowledged these short-term disruptions but maintained that long-term demand fundamentals remain strong.
“While near-term volatility, including disruptions in the Arabian Gulf and the Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand over the medium to long term,” the statement noted.
The move effectively ends nearly six decades of the UAE’s involvement in OPEC, which it joined in 1967 through Abu Dhabi, years before the formation of the federation in 1971.
Despite the exit, the UAE expressed appreciation for the organisation and its allies.
“We reaffirm our appreciation for the efforts of both OPEC and the OPEC+ alliance and wish them success. During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all,” the ministry stated.
“However, the time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets.”
The UAE stressed that its withdrawal does not signal a retreat from global energy cooperation but rather a shift towards greater flexibility in managing its oil output.
It pledged to continue supplying the market in a responsible and measured manner.
“Following its exit, the UAE will continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions,” the statement said.
The country also highlighted its competitive advantage in producing lower-carbon crude, positioning itself as a key supplier in an evolving global energy mix.
“The UAE is a trusted producer of some of the world’s most cost-competitive and lower-carbon barrels, which will play an important role in supporting global growth and emissions reduction,” it added.
The exit could weaken OPEC’s cohesion and complicate efforts to manage global oil supply, especially at a time when geopolitical risks are already straining the system.
The alliance, which includes major non-OPEC producers such as Russia, has been central to stabilising oil prices since its formation in 2016.
However, rising tensions in the Middle East, coupled with shifting national priorities among member states, are increasingly testing the group’s unity.
The UAE said it would continue investing across the energy value chain, including oil, gas, renewables, and low-carbon technologies, as part of a broader diversification strategy.
“It will continue investing across the energy value chain, including oil, gas, renewables, and low-carbon solutions, to support resilience and long-term energy system transformation,” the ministry stated.
The development comes at a critical time for the global economy, with energy markets already under pressure from geopolitical conflicts, supply chain disruptions, and the ongoing transition to cleaner energy sources.
For oil-dependent economies such as Nigeria, the implications are significant, as changes within OPEC and OPEC+ often influence crude prices, government revenues, and foreign exchange earnings, the developments present a mixed outlook, with potential revenue gains from higher crude prices but increased costs for refined petroleum products and broader economic instability.
The UAE’s decision could signal a broader shift in how major producers approach cooperation in an increasingly complex energy landscape.
As the Middle East crisis continues to unfold, attention will now turn to how OPEC responds to the exit, and whether the alliance can maintain unity in the face of mounting geopolitical and economic pressures.
The Organisation of the Petroleum Exporting Countries is one of the world’s most influential energy alliances, created in 1960 by five founding members, Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, during a meeting in Baghdad.
The group was established to coordinate petroleum policies among oil-producing countries, stabilise international oil markets, secure fair prices for producers, and ensure a steady supply of crude to consuming nations.
Over the decades, OPEC grew into a major force in the global economy, with its decisions on oil production often influencing crude prices worldwide. By increasing or cutting output quotas, the group can affect supply levels, making it a central player in determining global energy costs.
Its current members include major producers such as Saudi Arabia, the United Arab Emirates, Nigeria, Algeria, Libya, and Iraq.
While, OPEC+ is an expanded alliance formed in 2016 to include OPEC members and major non-OPEC oil-producing countries.
The “plus” refers to 10 additional producers led by Russia, alongside countries such as Kazakhstan, Mexico, and Oman.
The alliance was created after the 2014–2016 oil price crash, when crude prices plunged due to oversupply and weak demand.
Their monthly meetings are closely watched by governments, investors, refiners, and energy traders because any decision to raise or cut output can immediately influence international crude benchmarks such as Brent crude and West Texas Intermediate.
Shell Nigeria Gas (SNG) shared its experiences in pioneering gas distribution nearly 30 years ago, and identified the expansion of pipeline natural gas infrastructure and the market‑making role of gas distributors as critical in moving gas from a policy aspiration to a practical energy solution for Nigerian industries.
“When SNG started in Agbara–Ota over 20 years ago, demand was nowhere near what it is today,” recalled Managing Director Ralph Gbobo at a panel session on “Building a Bankable Gas Distribution Ecosystem: Infrastructure, Capital and Market Demand” at the 2nd business forum of the Association of Local Distributors of Gas (ALDG) in Abuja late last week.
Represented by Head, Gas Distribution, Chukwuka Amos-Ejesi, Raph said: “The economics was not perfect, but there was a leap of faith anchored on Nigeria’s industrialisation trajectory. That decision has proven right.”
He said SNG’s persistence proved that when demand ambition, supply certainty, enabling infrastructure, and commercial clarity come together, even if not perfectly at the start, it creates industrial clusters that can grow and attract long-term capital. “Sustainability and bankability emerge over time, as utilization deepens and confidence builds,” he pointed out.
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The theme of the forum was “From Gas Abundance to Gas Access: Reassessing Nigeria’s Gas Distribution Imperatives,” with industry leaders and other stakeholders discussing the use of gas to drive industrialisation. The panel session agreed on the need for “clear, supportive and credible policy frameworks, especially measures designed to improve the use of gas.
Ralph noted: “The introduction of gas-focused policies, notably the Petroleum Industry Act, marked a turning point. By reinforcing the role of gas in Nigeria’s energy and industrial strategy and embedding instruments such as the Network Code- a critical framework that governs the operations of the Domestic Gas market and ensures transparency and stability, and the Domestic Gas Supply Obligation which compels gas producers to allocate gas to the domestic market, the PIA significantly reduced policy ambiguity around gas development.”
He added: “The introduction of clearer pricing frameworks for gas supply and transportation and a more transparent and competitive licensing regime, has also strengthened market confidence. Together, these measures have improved producer confidence, particularly for domestic gas projects, and signaled the government’s strong commitment to gas as a driver of industrial development.”
Incorporated in 1998 as a fully Shell-owned gas distribution company, SNG currently serves over 150 clients in Abia, Bayelsa, Ogun and Rivers states, partnering with governments and other stakeholders to take the cleaner and more affordable energy to the doorsteps of industries. In the first half of this year alone, the company has connected two additional companies in Ogun State to its gas distribution network.
Photo Caption – L–R: Chairman, Association of Local Distributors of Gas (ALDG), and Managing Director, Axxela Gas Distribution, Kehinde Alabi; and Head of Gas Distribution, Shell Nigeria Gas, Chukwuka Amos-Ejesi, receiving a commendation plaque on behalf of SNG Managing Director, Ralph Gbobo, in recognition of his professional and diligent service on the Governing Board of the Association, at the Association of Local Distributors of Gas (ALDG) Business Forum in Abuja
In what is expected to provide investors and industry stakeholders with a detailed overview of Nigeria’s energy assets and opportunities, her first comprehensive Gas and Power Infrastructure Map will be unveiled at the 25th edition of NOG Energy Week.
It was gathered that the publication, developed by the Gas for Africa programme in partnership with NNPC Limited, will be launched during the annual energy conference in Abuja and is being positioned as a major step towards improving transparency and investment decision-making in Nigeria’s gas and power sectors.
Industry stakeholders have long cited the lack of consolidated and reliable infrastructure data as a major challenge to attracting investment into the sector. The new map seeks to address that gap by providing a single source of information on Nigeria’s gas and power infrastructure, including pipelines, gas processing facilities, power generation assets, LNG terminals and key transmission networks.
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Alongside the infrastructure map, organisers will also release a comprehensive report on Nigeria’s gas sector, which they describe as the most extensive industry intelligence publication ever produced on the country’s gas value chain.
The report examines developments in the sector since 2020 and covers key areas such as the NNPC Gas Master Plan 2026, gas reserves and production trends, pipeline infrastructure, capacity challenges, compressed natural gas (CNG), piped natural gas (PNG), liquefied natural gas (LNG) markets, gas-to-power projects and gas-based industrialisation.
According to the organisers, the publication provides an end-to-end assessment of Nigeria’s gas industry and offers critical insights for investors, policymakers and industry operators.
The launch comes at a time when global energy markets are undergoing significant shifts, driven by geopolitical tensions and increasing demand for alternative and secure energy supplies.
Organisers noted that Nigeria is strengthening its position as a major energy player, supported by rising crude oil production, implementation of a new Gas Master Plan and expanding refining capacity.
They said the infrastructure map and accompanying report are expected to help convert investor interest into concrete projects by providing accurate data on existing assets, infrastructure gaps and future opportunities across the sector.
Attendees at NOG Energy Week will be the first to access both publications as government officials, energy executives, investors and industry leaders gather in Abuja for the five-day event.
The conference is also expected to feature investment discussions, joint venture announcements, memorandum of understanding signings and project partnerships aimed at advancing Nigeria’s energy development agenda.
With preparations gathering momentum ahead of the event, organisers said NOG Energy Week 2026 will provide a platform for stakeholders to examine the future of Nigeria’s energy sector and its role in Africa’s broader energy transition and industrial growth.
OPEC+ ministers decided Sunday to increase oil quotas by a total 188,000 barrels per day for July, in a move analysts said would be unlikely to have an impact on prices sent higher by the Mideast war.
Jorge Leon, analyst at Rystad Energy, said ahead of the expected increase that it “means very little while the Strait of Hormuz remains closed”.
He added: “The market is not short of quota announcements; it is short of physical barrels that can actually move. In that sense, the 188,000 barrels per day increase would be more of a policy signal than a real supply boost.”
The hiked production output was agreed Sunday in a video meeting of oil ministers from key OPEC+ countries Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, a statement from the organisation said.
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The increase was similar to ones decided in previous months.
The OPEC+ statement said the latest agreed hike was “to support oil market stability” but that the seven countries also saw an opportunity “to accelerate their compensation” in a time of historically high oil prices.
It added that the ministers “reaffirmed the importance of adopting a cautious approach and retaining full flexibility to increase, pause or reverse the phase out of the voluntary production adjustments, including reversing the previously implemented voluntary adjustments announced in November 2023”.
Leon, at Rystad Energy, said that OPEC+ was wary in case the Mideast war changes, and Iran’s stranglehold on the Strait of Hormuz eases.
“When the Strait of Hormuz reopens, the market could move very quickly from fear of shortage to fear of surplus,” he said.
“Returning OPEC+ supply, a stronger US shale response and weaker demand after a period of very high prices could leave the market with a very large oversupply problem,” he said.
AFP
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