United Arab Emirates on Tuesday announced that it would exit from the Organization of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ alliance effective May 1, 2026.

The country said that a shift in its “long-term strategic and economic vision” and its evolving energy profile, including increased investments in domestic production capacity, prompted this exit.

What is OPEC and OPEC+?

OPEC was was founded in 1960 by Iraq, Iran, Kuwait, Venezuela and Saudi Arabia and was designed to coordinate petroleum policies and stabilise prices. The UAE joined in 1967 and OPEC now includes 12 countries, largely from the Middle East and Africa.

In 2016, the group expanded into OPEC+, bringing in major non-OPEC producers like Russia to strengthen its influence over global oil supply.

According to the International Energy Agency OPEC+ accounted for nearly half of global oil and liquids output last year. The UAE’s exit might reduce the group’s control over global supply, as the country is the fourth largest producer of Oil within OPEC.

Why did the UAE exit?

UAE chose to exit after years of friction with Saudi Arabia over production quotas. While Riyadh pushed for strict supply discipline to support prices, Abu Dhabi has sought a higher production ceiling to reflect expanded capacity backed by a USD 150 billion investment programme.

The UAE will no longer be bound by coordinated production cuts and will gain flexibility to raise output in line with its capacity and market conditions, once it is outside OPEC and OPEC+ .

How does this affect Indian markets?

Experts believe that global supply is unlikely to rise significantly in the near term due to ongoing disruptions in the Strait of Hormuz.

India might be one of those countries that are looking to benefit from this crisis as it might diversify import sources to offset uncertainty from the Middle East. In the long term, this might be positive for India and oil & gas exporting countries. The exit of UAE could create more supply and soften crude prices.

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