Report · Oil markets
UAE Leaves OPEC: A Quota Dispute Becomes a Market Structure Shock
With Hormuz constraining Gulf exports, the UAE’s OPEC exit was a longer-term supply story. The report examines the implications for quota discipline, spare capacity and Saudi Arabia’s response.
Co-authored with Jack Ryan and Michael Wu.
Full report: 9-minute read.
Shipping and Saudi policy shape the price outcome
US$ per barrel · Brent · report scenarios
- Hormuz risk persists
- 115–130
Gulf shipping constraints continue to support prices.
- Export flows normalise
- 90–105
UAE barrels return without offsetting Saudi cuts.
- Saudi Arabia offsets supply
- 100–115
Saudi output falls by 0.5–1.0 million barrels a day.
- Quota discipline weakens
- 75–90
Independent or non-compliant OPEC-linked supply rises by 1.0–1.5 million barrels a day.
Conditional views from 1 May 2026, not observed prices. Normalisation and producer-response scenarios apply after the Hormuz shock eases; wider fragmentation is the bearish stress case.
Summary
The UAE left OPEC and OPEC+ with effect from 1 May 2026, after a dispute over a quota of 3.4 million barrels a day that sat well below the capacity it had invested in. We did not expect its departure to release extra supply immediately. Gulf shipping risk still dominated, and the UAE’s bypass pipeline was expected to be running at or near capacity.
Our overall view was that Brent would stay supported near US$115–130 a barrel while Hormuz risk persisted, then move towards US$90–105 if UAE barrels re-entered a normalised shipping market without offsetting Saudi cuts. The longer-term implication was a weaker and less cohesive OPEC framework.
Key findings
The UAE is the only OPEC member other than Saudi Arabia with significant spare capacity, so its departure leaves the group less flexible in future supply shocks.
The UAE’s economy depends less on oil than Saudi Arabia’s, which makes it more tolerant of lower prices and more focused on volume.
The report sets out four scenarios, from a symbolic exit with little change in output to wider OPEC fragmentation or a Saudi counter-response to defend the price.
What would change the view
Would weaken the view
- Saudi Arabia cuts output by 0.5–1.0 million barrels a day to offset extra supply, and Brent could hold at US$100–115 a barrel even after the Hormuz shock eases.
Would strengthen it
- Gulf exports reopen, the UAE lifts production by 500,000–800,000 barrels a day over the next several months and Brent could fall back towards US$90–105 a barrel.
Would move it either way
- Other producers test or ignore quota discipline, non-compliant or independent OPEC-linked supply rises by 1.0–1.5 million barrels a day and Brent could fall towards US$75–90 a barrel once the Hormuz premium fades. The report calls this its bearish stress case: it would bear out the weaker OPEC the report expected, but take Brent below the US$90–105 of its overall view.
Conditions as set out in the report when it was published.
Read the full report for the complete analysis.
Read the full report at 6:05 MarketsDated analysis from 1 May 2026. Views reflect the information available at the time and have not been updated. Nothing here is investment advice.