How much control does OPEC still have over oil prices after UAE’s exit?

Dubai: The exit of the UAE from OPEC reduces the volume of oil managed through coordinated quotas, narrowing the portion of the market through which the group can influence prices and raising questions about its ability to steer oil prices.

OPEC does not set oil prices directly but influences them by adjusting supply, with its impact tied to how much production sits within its system. The UAE’s departure shifts part of that supply outside coordinated decision-making.

Before exiting, the UAE accounted for roughly 13–14% of OPEC output or capacity and was producing about 3.6 million barrels per day (bpd), with capacity reaching as much as 4.85 million bpd by 2024. Other countries, including Qatar and Angola, have left the group, but the UAE’s departure is described as its most significant recent loss in terms of production scale.

In the near term, analysts say the impact on prices is limited, as supply conditions are shaped more by disruption than policy. Around 2 million bpd of UAE offshore production remains constrained by disruptions linked to the Strait of Hormuz, limiting the country’s ability to increase output even after its exit from OPEC. Analysts say it could take several months for production to return to earlier levels once flows resume.

“UAE’s departure from OPEC will have minimal impact on market fundamentals in 2026,” said Simon Flowers, chairman and chief analyst at Wood Mackenzie.

The more material shift is expected as these constraints ease and additional capacity comes online. The UAE has been expanding its upstream sector, with capacity at about 4.85 million bpd and a target of 5 million bpd by 2027, supported by around $145 billion in investment through 2030.

Under OPEC+, however, production was capped below this level, with a baseline of about 3.5 million bpd following earlier negotiations. “OPEC+ quotas constrained output well below capacity,” said Alan Gelder, Senior Vice President for Refining, Chemicals & Oil Markets at Wood Mackenzie, highlighting the gap between production potential and agreed limits.

Government officials flagged earlier this week how the UAE sought to remain “unconstrained” by quotas once current disruptions ease, indicating that the impact of its exit is more likely to emerge as production capacity is brought back online.

“The decision to leave was taken a long while ago, so it was just a matter of timing,” said Neil Quilliam, an energy and geopolitics expert at Chatham House. The UAE’s exit reflects a widening gap between its production capacity and the limits set under OPEC+ quotas.

The country has steadily expanded capacity to around 4.85 million bpd and is targeting 5 million bpd by 2027, while its agreed baseline under OPEC+ remained at about 3.5 million bpd. Wood Mackenzie’s Macro Oils and Upstream experts said this divergence between capacity growth and quota allocations had become a central factor behind the shift, as investment-driven output potential outpaced coordinated production limits.

As additional capacity comes online outside OPEC coordination, a larger share of global supply is expected to be set independently. This reduces how directly OPEC’s output decisions feed into price movements, particularly in conditions where relatively small increases in supply can offset coordinated cuts.

Jorge Leon of Rystad Energy said spare production capacity is becoming more concentrated among fewer producers, limiting the number of countries able to adjust output quickly in response to market changes.

This concentration means OPEC’s ability to influence prices depends not just on total output, but on how much flexible supply it can deploy in response to shifts in demand or disruption. Wood Mackenzie also noted the UAE “has the capability to take a growing share of global oil demand,” pointing to rising competition for market share as new capacity enters the market.

It added that “beyond this year, losing the UAE will compound OPEC’s challenge to balance the market and increase the risk of oversupply weakening prices,” highlighting how additional supply outside coordinated limits could weigh on prices if demand growth slows.

Demand continues to absorb part of the additional supply entering the market, with global oil consumption rising by about 1 to 1.5 million bpd annually, driven largely by Asia and other developing economies.

“There will be more supply, no doubt. They will have bargaining power. But again, you will need more oil. Oil demand is increasing by about a million to a million and a half every year, and it's mainly coming from Asia and other developing countries,” said John Sfakianakis, chief economist at the Gulf Research Centre.

“So yes, they could have some bargaining power, but that doesn't mean that they have enormous bargaining power only because demand is increasing. You have bargaining power when demand is decreasing, and prices are falling; you can accommodate that by negotiating harder,” he added.

The question is not whether OPEC can now move prices, but how much of the market it still controls as more supply sits outside its framework, with the impact limited in the near term but becoming more pronounced from 2027 as new capacity comes online.