UAE exit from OPEC+ weakens supply coordination, raises oil price volatility risks, says Rystad
Thursday, April 30 2026 - 01:59 PM WIB
By Romel S. Guky
The United Arab Emirates’ decision to exit the OPEC+ alliance will weaken the group’s control over spare capacity and increase oil price volatility, according to analysis by Rystad Energy.
The UAE is set to leave the producer group from May 1, marking what Rystad described as a long-term strategic shift toward production flexibility rather than a response to near-term market conditions.
The move reflects tensions between Abu Dhabi’s ambitions to expand output capacity and the constraints imposed by OPEC+ quotas, particularly as state firm ADNOC advances a series of projects aimed at boosting production capacity to 5 million barrels per day by 2027, with further growth beyond that.
Rystad said the UAE’s departure does not immediately change global supply levels, but it alters expectations around how future production will be managed, shifting the market toward a more competitive, capacity-driven model.
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A key impact is on spare capacity. The UAE accounted for about 1.54 million barrels per day, roughly a quarter of OPEC+’s total spare capacity of nearly 6 million barrels per day as of February 2026. Its exit removes that buffer from coordinated control, reducing the group’s ability to respond collectively to supply disruptions.
The analysis comes amid ongoing disruptions linked to tensions in the Strait of Hormuz, which have already pushed production below quotas across several producers.
Rystad noted that OPEC+ output stood at 27.68 million barrels per day in March, well below its quota of 36.73 million barrels per day, largely due to conflict-related disruptions rather than voluntary cuts.
The UAE itself produced about 1.9 million barrels per day in March, significantly below its target of 3.23 million barrels per day.
Looking ahead, the shift is expected to reshape pricing dynamics. While geopolitical risks continue to support prices in the near term, reduced coordination within OPEC+ could amplify downside risks once supply disruptions ease.
Rystad said the market is moving away from a system where coordinated production cuts provided a price floor, toward one where competition among producers and capacity expansion play a larger role, potentially leading to wider and less predictable price swings.
Editing by Alexander Ginting