Key Points
Countries such as Qatar, Ecuador, and Angola have previously withdrawn from OPEC. Andy Lipow, President of Lipow Oil Associates: The UAE is not the first nation to leave OPEC and likely won't be the last. Data from the International Energy Agency shows the UAE's crude oil production was approximately 2.37 million barrels per day in March, while its sustainable production capacity is about 4.3 million barrels per day.
The unexpected announcement of the UAE's withdrawal from OPEC is impacting global energy markets and exposing fissures within the powerful oil cartel. The production quota system could prompt other member nations to follow suit and exit. This decision comes weeks after Iran, also an OPEC member, launched multiple missile and drone attacks against the UAE. Furthermore, blockades in the Strait of Hormuz have disrupted UAE oil exports, severely impacting its key economic sector. Andy Lipow, President of Lipow Oil Associates, stated via email: "The UAE's exit is just another chapter in the shifting landscape of OPEC membership. If countries adhering to quotas become dissatisfied with those consistently overproducing and flouting their limits, further departures could follow. This could ultimately erode OPEC's practical influence as an oil cartel." Over the years, nations including Qatar, Ecuador, and Angola have left the organization, often due to disagreements over production quotas or shifts in national development strategies. Angola exited in 2024, and Qatar terminated its membership in 2019. OPEC has long grappled with inconsistent compliance with production quotas among its members, with countries like Iraq and Kazakhstan historically frequently exceeding their production limits. Lipow added, "The UAE's departure from OPEC is not the first instance and is highly unlikely to be the last." Nations that have grown weary of persistent overproduction by some members within OPEC and the broader OPEC+ alliance may choose to leave the organization. The core reason for the UAE's exit is a long-standing industry conflict: after heavily investing to increase their crude oil production capacity, some countries are increasingly reluctant to be bound by production quotas designed to support prices. Latest data from the International Energy Agency indicates the UAE's crude oil production was around 2.37 million barrels per day in March, whereas its actual sustainable capacity is approximately 4.3 million barrels per day.
List of Potential Exits
Analysts point to several countries dissatisfied with OPEC+ production restrictions as having high potential to withdraw. Matt Smith, Lead Oil Analyst at commodity data analytics firm Kpler, identified Kazakhstan as a primary potential candidate, noting its significant and prolonged overproduction last year. "Kazakhstan has severely overproduced in the past year and might see the UAE's exit as an opportunity for its own departure," he said. He also highlighted Nigeria as another country to watch closely. As Africa's largest crude oil producer, Nigeria is increasingly focusing on its domestic refining industry, especially after the launch of the large-scale Dangote refinery. This has reduced its reliance on crude export markets and consequently weakened its willingness to adhere to OPEC quotas. Smith explained that as the Dangote refinery ramps up capacity, Nigeria can process more crude domestically, earning higher profits from refined products. This reduces its dependence on OPEC's strategy of cutting production to bolster crude prices, shifting its focus instead toward maximizing output and deepening downstream refining profits. "Nigeria is unwilling to be constrained by quotas anymore. With rising self-sufficiency in domestic refining, its risk of exiting is high," Smith stated. "Diverting domestic crude to supply the Dangote refinery significantly insulates Nigeria from global crude market volatility." Market observers believe Venezuela is another potential candidate for exit. The country's crude production recovery has exceeded expectations, and with its domestic political stance softening towards the US, the Caracas government desires greater autonomy over its production levels. Saul Cavonic, an analyst at energy analysis firm MST Marquee, said, "Following Venezuela's political pivot towards a more US-aligned stance, it could very well be the next country to leave OPEC." Kpler's Smith also considers Venezuela's exit quite probable, given its crude production and export growth have both surpassed expectations. In March this year, Venezuela's crude exports exceeded 1 million barrels per day for the first time since September of last year. The energy ministries of Kazakhstan, Nigeria, and Venezuela have not yet responded to requests for comment.
Reportedly, OPEC+ is implementing a core production cut agreement, reducing overall output by approximately 2 million barrels per day, a policy extended until the end of 2026. According to an official OPEC statement, eight core OPEC+ producers, including Saudi Arabia and Russia, reached a consensus on April 5th to cautiously ease voluntary production cuts. Starting in May this year, they will gradually restore 206,000 barrels per day of crude supply, from a combined reduction of 1.65 million barrels per day originally planned for 2023.
Internal Divisions, But Still Relevant?
The UAE's departure occurs as OPEC faces significant fragmentation. Nations like Iran, Libya, and Venezuela are exempt from production quotas due to sanctions or internal conflicts, further complicating coordination and cohesion within the organization. Lipow suggested that discontent over perceived unfair quota enforcement could fuel further exits: "Seeing OPEC and OPEC+ partners consistently violate production limits may eventually lead compliant countries to consider leaving." The industry believes that a weakening of discipline within OPEC+ could amplify oil price volatility. Bob McNally, President of Rapidan Energy Group, stated, "The primary impact would be increased turbulence in international crude oil prices." However, some argue that even with fewer members, OPEC's core function of stabilizing the crude market remains irreplaceable. Claudio Galimberti, Senior Vice President at Rystad Energy, noted that OPEC has demonstrated considerable resilience in the past, particularly during crises like the COVID-19 pandemic. "Over the last decade, OPEC+ has played an indispensable role in balancing global crude oil supply and demand. Without OPEC+ coordinating production cuts during the pandemic, international oil prices would have experienced massive fluctuations."
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