Every cartel is destined to eventually fail. As members struggle to respond to the emergence of new external supply sources, shifts in individual national circumstances, and disputes over production allocations among members, internal fractures inevitably develop. OPEC is unlikely to be an exception. The United Arab Emirates' decision to exit both OPEC and the broader "OPEC+" coalition of oil-producing nations represents the most significant challenge the cartel has faced in decades and will profoundly alter efforts to manage the oil market. This move signifies a rejection of the production control system, led by Saudi Arabia in recent years. The damage to the cartel would be far more severe if other major producers also decide to leave or feel emboldened to disregard production agreements in pursuit of their own interests. According to the U.S. Energy Information Administration, in 2025, the UAE was the fifth-largest crude oil producer within OPEC+, with a daily output nearing 3.4 million barrels, trailing only Saudi Arabia (9.3 million bpd), Russia (9.1 million bpd), Iraq (4.3 million bpd), and Iran (3.4 million bpd). In practice, the UAE was the fourth-largest producer subject to the group's production controls, as Iran, alongside Venezuela and Libya, is exempt from quota restrictions. While the UAE's share of the global crude market is relatively modest at 4%, its proportion within OPEC's total output is significantly higher at 12%, and even more so among countries bound by quotas at 15%. Despite this, the UAE's importance is often underestimated, as it has been one of the few members with both the capability to increase production and the spare capacity to help support prices. Despite formal caps set by production agreements, most OPEC+ members have been producing as much crude as they are technically able. Cartels typically push prices above the level that would exist without them, but this encourages accelerated supply growth from sources outside the group, threatening their market dominance. For a decade, OPEC+'s share of production has been declining, as high prices have spurred rapid growth in oil supply from non-cartel countries, notably the United States, Canada, Brazil, Guyana, and Argentina. The cartel's quotas have become increasingly detached from reality, as some members maintain or increase output while others struggle due to war, sanctions, corruption, and mismanagement. Efforts to update the agreements have been stymied by disagreements among OPEC+ members on how—or even whether—to revise quotas to reflect the changing landscape of production and capacity. Saudi Arabia's dominance within OPEC has grown, as it is the largest producer and one of the few members both willing and able to make significant output adjustments based on market conditions. For over a decade, production decisions have been increasingly driven by the Kingdom—other members are invited to consent or face the threat of uncontrolled production and a price war. Saudi leadership within the cartel has made it a target for criticism from other members dissatisfied with current production decisions and future quota allocations. For years, the UAE has demanded a higher quota to reflect its substantial investments in new capacity and its ambition to increase output. Now, by leaving OPEC, it will be free to make its own production decisions. Other nations have previously left the cartel, including Angola, Ecuador, and Qatar. In the UAE's case, for a financially robust and rapidly growing producer, a sense of frustration at being constrained by an organization focused on limiting output to prop up prices was perhaps inevitable. However, the UAE's choice to make this move during a time of war and the most severe supply disruptions in decades reflects a broader rift emerging between the UAE and Saudi Arabia. The two nations have always been both allies and rivals, each with ambitions to exert leadership in the Persian Gulf and across the Middle East and North Africa. Saudi Arabia's modernization plans and its pressure on international firms to locate regional headquarters in the Kingdom have brought it into direct competition with traditional hubs like Dubai and Abu Dhabi. Differing approaches to handling Iran, following the outbreak of war between Iran and the U.S., appear to have brought long-simmering tensions between them to a head. The result is that the UAE's top policymakers are no longer prepared to play a secondary role to Saudi Arabia's "big brother" within OPEC and have decided to chart their own production policy. Freed from OPEC's constraints, the UAE is likely to ramp up production faster than it otherwise would, adding downward pressure on oil prices in the medium term.
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