United Arab Emirates Exits OPEC as Iran Conflict Intensifies Gulf Uncertainty

The United Arab Emirates announced on Tuesday that it will withdraw from the Organization of the Petroleum Exporting Countries (OPEC), a move that comes amid escalating regional tensions linked to the ongoing conflict involving Iran. The decision signals a potential shift in the country’s oil production strategy and its role in global energy markets.

The UAE, one of OPEC’s top oil producers after Saudi Arabia and Iraq, is expected to increase its output following its departure. However, ongoing disruptions in the Strait of Hormuz may limit how quickly additional supply can reach international markets.

In a statement released by its state news agency, the UAE indicated that it would continue to act responsibly by introducing additional oil production gradually, aligning supply with global demand and prevailing market conditions.

The country has long played a significant role within OPEC, with Abu Dhabi joining the organization in 1967 and the UAE maintaining membership since its formation in 1971. Its exit marks a notable development for the oil alliance.

Officials acknowledged that short-term instability, particularly disruptions in the Arabian Gulf and the Strait of Hormuz, continues to influence supply chains. Nevertheless, they emphasized that long-term projections still point to sustained growth in global energy demand.

Energy analysts view the move as a structural shift for OPEC. While immediate effects may be limited due to existing supply disruptions, the longer-term outlook suggests the organization could face reduced cohesion and influence.

Meanwhile, oil prices have surged amid stalled diplomatic efforts with Iran. U.S. crude oil prices exceeded $100 per barrel for the first time in weeks, climbing to nearly $102 in early trading. Brent crude also rose sharply, approaching $113 per barrel.

Fuel prices have followed suit, with the average cost of gasoline in the United States reaching $4.18 per gallon, its highest level this year.

Earlier in April, oil prices had briefly declined following a ceasefire announcement, but rebounded after it became clear that key shipping routes, including the Strait of Hormuz, remained restricted.

Diplomatic tensions have further escalated after U.S. officials canceled planned talks with Iranian representatives, maintaining a naval blockade on Iranian ports. Iran, in turn, has threatened to restrict maritime traffic through the strategic waterway.

Financial institutions have revised their oil forecasts upward in response to the evolving crisis. Analysts now anticipate higher prices through the year, citing prolonged supply disruptions and slower recovery in production levels.

Estimates suggest that up to 14.5 million barrels per day of crude oil output in the Persian Gulf region have been impacted by the conflict. The disruption has also affected jet fuel supplies, prompting airlines worldwide to scale back operations.

Experts warn that demand for jet fuel is likely to weaken further as airlines in Asia and Europe continue to reduce capacity. While gasoline prices have risen more slowly than other refined products, analysts caution that this relative stability may not last, especially as seasonal demand increases.

Overall, the combination of geopolitical tensions, constrained supply, and shifting production strategies is expected to keep global energy markets under pressure in the months ahead.