UAE quits OPEC as Hormuz shut-in nears 100m barrels a week
Abu Dhabi's exit strips nearly 5 million bpd from the cartel while it races to build a pipeline around a closed Strait of Hormuz.
ADNOC chief executive Sultan Ahmed Al Jaber said on Wednesday (2026-05-20) that the United Arab Emirates had built nearly 50% of a second pipeline designed to bypass the Strait of Hormuz, and that more than 1 billion barrels of oil have already been lost to the strait's closure, with nearly 100 million more lost every week it stays shut.2
The pipeline race follows the UAE's decision, announced Tuesday (2026-05-19), to quit OPEC and OPEC+ altogether, dealing a heavy blow to the exporting groups and their de facto leader, Saudi Arabia, during an energy shock triggered by the US-Israel war on Iran.3,5
The stakes for the cartel are physical, not symbolic. OPEC loses its third-largest producer and nearly 5 million bpd of capacity, while Saudi Arabia absorbs a heavier burden for price stabilisation and the credibility of collective supply management erodes.1
Rystad Energy said losing a member with 4.8 million bpd of capacity, and the ambition to produce more, takes a real tool out of the group.5
The capacity constraint helps explain the exit. Before the war the UAE's production capacity had grown to 4.8 million bpd, but its OPEC quota capped output at 3.2 million bpd, and last year it exported 1.7 million bpd of crude and refined fuels through Hormuz, short of its ambitions.6
The strait remains effectively closed. Gulf producers have collectively shut in roughly 9.1 million bpd, according to figures cited in the JINSA analysis.1
Abu Dhabi has redirected some barrels through an existing pipeline to Fujairah, which tops out at 1.8 million bpd, but that capacity is not enough to clear the backlog. Al Jaber said too much of the world's energy still moves through too few chokepoints.2
If traffic returns to pre-war levels, the UAE could flood the market with 1.6 million bpd of extra production, equivalent to about 1.5 percent of global supply, enough to hand it leverage over prices and Saudi market share.6
The politics run alongside the economics. The exit is read as a win for US President Donald Trump, who has accused OPEC of ripping off the United States, and it reignites the simmering rows between the UAE and Saudi Arabia that were papered over by shared anger at Iran's attacks on Gulf states since the war began.4,7
Prices show a market that has absorbed the shock but not priced away the risk. ICE Brent crude front-month sat at $75.22 in Friday's (2026-07-10) data, Dubai crude at $70.48 and the OPEC basket at $76.25. [LIVE PRICES]
The near-term signal is whether the UAE's departure pulls other Gulf producers out behind it. Should they judge that going it alone hedges both Hormuz risk and Saudi dominance, the group's cohesion could fray further. For now OPEC is smaller and weaker, managing an open crisis with one fewer major producer at the table and a chokepoint still bleeding roughly 100 million barrels a week.1,23