28/04/26
UAE to exit Opec: Update
adds details throughout Dubai, 28 April (Argus) — The UAE said it will withdraw
from Opec and the wider Opec+ alliance from 1 May, marking a major shift in its
oil policy. The decision follows a review of production strategy and capacity
plans. The UAE said it wants greater freedom to respond to global oil demand in
line with its national interest. The move comes during heightened energy market
volatility, caused by disruption to shipping through the strait of Hormuz that
has constrained Mideast Gulf oil and gas exports and reshaped supply flows. The
UAE said exiting Opec+ will allow it to better align its crude output with
market conditions. The UAE has been a member of Opec since 1967, through Abu
Dhabi, and remained part of the group following the country's establishment in
1971. Its departure represents one of the most consequential changes to the oil
producer group in decades. Abu Dhabi has expanded crude production capacity in
recent years and pushed for higher output baselines under Opec+ quota
frameworks, reflecting its aim to monetise reserves and capture market share.
State-controlled Adnoc aims to raise crude production capacity to 5mn b/d by
2027 , with its most recent guidance, in May 2024, putting capacity at 4.85mn
b/d. Leaving the alliance removes formal quota constraints, allowing the UAE to
raise production more freely, albeit gradually and in line with demand. The UAE
said it will continue to prioritise supply stability, cost competitiveness and
sustainability, while investing across oil, gas, renewables and lower-carbon
technologies. Adnoc chief executive Sultan al-Jaber said the exit is a
"sovereign decision" aligned with the country's long-term energy strategy,
production capacity and national interest, and that the UAE would maintain a
focus on global market stability. Adnoc's strategy focuses on meeting global
energy demand "with reliability and responsibility", he said, adding that
partnerships and credibility would still be key to its approach. "The decision
is not intended to signal a break with the market, nor to trigger an immediate
supply response," a source with knowledge of the matter said. Abu Dhabi's
emphasis is on flexibility as global demand patterns shift and geopolitical
tensions linked to the Iran war add volatility to markets, the source said.
"There is no plan to flood the market," the source added, saying any increase in
crude output would be gradual and timed to market conditions. In the near term,
the move is unlikely to materially alter supply flows. Production across the
Gulf remains constrained by disruptions around the strait of Hormuz, which are
limiting export capacity regardless of Opec+ quota structures. The UAE can
bypass Hormuz using the 1.5mn b/d Adcop pipeline, but it is still producing at a
fraction of pre-war levels. Crude output last month was just over 1.9mn b/d,
down from 3.53mn b/d in February, according to Argus estimates. March output was
more than 1.5mn b/d short of the UAE's Opec+ target for the month. But the
rationale in Abu Dhabi is forward-looking. "Once flows normalise, the UAE wants
the ability to raise output without restrictions and respond directly to market
needs," the source said. From the UAE's perspective, this would allow it to add
supply into a tight market when required, positioning it as a stabilising
supplier with spare capacity. Over time, greater flexibility could translate
into additional supply reaching the market, with potential implications for
prices if higher volumes are sustained. By Bachar Halabi Send comments and
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