The United Arab Emirates' decision to leave OPEC after more than 50 years is expected to weaken the powerful oil cartel, but analysts differ on how significant the impact will be.
"There's no way to underplay UAE's departure," Frank Fannon, a former assistant secretary of state for energy resources in the first Trump administration, told The New York Times.
"It's part and parcel of a general shift," he added. "There's the lack of trust among members, particularly with one of them shooting at other members. It's a very big deal."
The departure comes as OPEC's influence has already been eroded by the rise of the United States as the world's largest oil producer and by the exit of several member nations in recent years.
The UAE, one of the group's largest producers, accounts for roughly 12% of OPEC's output, or about 3.6 million barrels per day.
The announcement comes amid heightened tensions in the Middle East, with the United States and Israel in a standoff with Iran, an OPEC founding member.
The conflict has disrupted oil and natural gas flows through the Persian Gulf, including the Strait of Hormuz, a key shipping route, adding instability to global energy markets.
For now, the market reaction has been muted, with oil prices showing little movement following the announcement.
Analysts said the ongoing conflict and supply disruptions are overshadowing the immediate impact of the UAE's exit.
Longer-term effects may become clearer if the Strait of Hormuz reopens and production levels across the region return to normal.
Without the UAE, OPEC's largest producers will be Saudi Arabia, Iraq, and Iran, a grouping some analysts view as less cohesive.
"It's pretty hard to envision how OPEC could continue to be a functioning organization for friendly collaboration, at least in the short term and maybe forever," said Amy Myers Jaffe, director of New York University's Energy, Climate Justice, and Sustainability Lab.
Others said OPEC has endured similar challenges in the past. Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, said predictions of the group's demise may be premature.
"The death of OPEC has been proclaimed many times before, and the withdrawal of a producer as important as the UAE is certainly a large blow," Bordoff said. "But I don't think we know enough yet to proclaim OPEC dead."
Saudi Arabia, OPEC's de facto leader, has sought to bolster its influence by coordinating production with Russia and other countries through the OPEC+ alliance.
Historically, OPEC has weathered member departures, including Ecuador, Indonesia, Qatar, and Angola, some of which later rejoined or suspended participation multiple times. At its peak, the organization had 16 members; it is expected to have 11 after the UAE's exit.
Analysts said the loss of the UAE is more consequential than previous departures. Outside Saudi Arabia, the country was one of the few members with significant spare production capacity, allowing it to quickly adjust output and influence prices.
UAE Energy Minister Suhail Al Mazrouei sought to reassure markets following the announcement, saying the country would continue to support stability in global energy supplies.
"We will look for the right measures to balance the market, the right measures to help the consumers all over the world," he said.
Analysts at Morningstar said the move reflects the UAE's strategy to expand its role as a diversified energy producer, including investments tied to electrification and economic growth.
The departure may also align the UAE more closely with the United States, which has long sought to limit OPEC's influence. President Donald Trump has repeatedly called on the group to increase production to lower oil prices.
U.S. output has reshaped global energy markets over the past decade. The country surpassed Russia in natural gas production in 2011 and became the world's top oil producer in 2018, according to the Energy Information Administration.
Saudi Arabia is expected to work to keep remaining members unified in an effort to maintain influence over global oil supply and pricing.
"The Saudis want to stay with other Gulf producers like Kuwait and Iraq," said Richard Goldberg, a senior fellow at the Foundation for Defense of Democracies.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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