TEHRAN- Energy market analysts and observers believe that the UAE's exit from OPEC and the OPEC+ group will weaken the influence of the organization's member countries and their allies in the oil market and free up Abu Dhabi to increase its oil sales. However, they say it will not disrupt the cohesion of OPEC and OPEC+.

According to an IRNA report quoting Reuters, representatives of the OPEC+ group and analysts say that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will lose some of their influence in the oil market following the UAE's withdrawal from the organization. Nevertheless, they predicted that the remaining OPEC members would stay united and continue coordinating on oil supply policy. 

The UAE, the fourth-largest oil producer in OPEC, announced its departure from the organization on Tuesday after nearly 60 years of membership.

This decision will free Abu Dhabi from OPEC and its allies' oil production program designed to balance supply and demand. 

Five informed sources within the OPEC+ group, who spoke on condition of anonymity as they were not authorized to speak with the media, said the UAE's exit comes as a shock. 

Four of these sources stated that the UAE's departure will further complicate OPEC+'s efforts to balance the market by adjusting supply, as the group will control a smaller share of global production. The UAE will become the largest oil producer to leave OPEC, dealing a significant blow to the organization and its de facto leader, Saudi Arabia.

Before the aggressive war of the United States and the Israeli regime against Iran — which forced Abu Dhabi and other Persian Gulf oil producers to reduce exports and shut down some production — the UAE supplied about 3.4 million barrels per day, or about 3% of global crude oil supply. 

After leaving OPEC, the UAE will join a number of independent oil producers such as the United States and Brazil. 

Currently, the UAE has little power to increase production or exports due to the near-complete closure of shipping through the Strait of Hormuz.

If shipping returns to pre-war levels, the UAE could increase its production to a capacity of five million barrels per day of crude oil and liquids. Previously, there were tensions with Saudi Arabia over the UAE's production quota of 3.5 million barrels per day. The UAE had requested a higher quota, reflecting its increased production capacity under a $150 billion investment program.

Helima Croft of RBC Capital Markets said: "For years, Abu Dhabi has been seeking to reap the returns on its investments in production capacity development." However, she noted that the aggressive war of the United States and the Israeli regime against Iran and the damage to the UAE's production facilities will slow down these plans.

For years, rumors have circulated about a possible UAE exit from OPEC+ amid deteriorating relations between Abu Dhabi and Riyadh due to conflicts in Sudan, Somalia, and Yemen. The UAE has also drawn closer to the United States and the Israeli regime.

The UAE and Saudi Arabia have also had differences for years over oil production and export policy, and now the UAE's exit from OPEC may, on a broader level, be a sign of a realignment of alliances in the Persian Gulf region amid intensifying regional rivalries.

The UAE is the fourth country to leave the OPEC+ group in recent years. Angola left the group in 2024, citing disagreements over production levels. Ecuador left OPEC in 2020, and Qatar left in 2019.

Gary Ross, a veteran OPEC watcher and CEO of Black Gold Investors, said OPEC+ will not collapse because Saudi Arabia remains willing to manage the market with the group's help.

Jorge Leon, a former OPEC official now working at the Rystad Energy research institute, said: "The UAE's exit marks a significant shift for OPEC, and its long-term consequence will be the weakening of OPEC's structure."

Croft also said that OPEC+ members will focus more on rebuilding war-damaged facilities than on implementing production cuts in the near future. She added that the dissolution of OPEC+ is not on the table for now.

In contrast, HSBC bank said in a research note published on Tuesday that the UAE's exit from OPEC and the broader OPEC+ group is expected to have a limited immediate impact on oil markets, but could erode the group's ability to regulate supply and control prices over time.

HSBC bank announced that once traffic through the Strait of Hormuz resumes, the UAE will no longer be obligated to comply with OPEC+ production quotas and can gradually increase its output. The bank estimates that the Abu Dhabi National Oil Company (ADNOC) could increase its production to more than 4.5 million barrels per day, while its OPEC+ quota was approximately 3.4 million barrels per day.

EF/MA