The United Arab Emirates announced Tuesday it will withdraw from the Organization of the Petroleum Exporting Countries (OPEC), marking the end of its decades-long alignment with the cartel.

The UAE said it will exit OPEC on May 1, in a major blow to the cartel that coordinates production among many of the world's largest oil producers.

The UAE was the third-largest producer in OPEC behind Saudi Arabia and Iraq.

On Tuesday, the UAE announced it would withdraw from OPEC and the wider OPEC+ alliance, effective May 1, removing the group's third-largest producer and further weakening the cartel's influence over global oil supplies and prices.

Energy Minister Suhail Al Mazrouei told CNBC that the UAE made the decision to leave OPEC at a time when it would be the least disruptive to the other producers in the group, saying "Our exit at this time is the right time for it, because it will have a minimum impact on the price and it will have a minimum impact on our friends at OPEC and OPEC+."

Iran War Creates Cover for UAE's Departure

Bloomberg reported that the UAE's Energy Minister Suhail Al Mazrouei said in an interview that the disruption caused by the war created an opportune time for the move.

CNN reported that the UAE took the decision now because the closure of the Strait of Hormuz will limit the impact on the oil market.

Shipping traffic through the Strait of Hormuz, a major maritime choke point for world energy trade, has been largely blocked by Iran since 28 February 2026, when the United States and Israel launched an air war against Iran.

Until the US–Israeli war against Iran, the Strait of Hormuz was open and about 25% of the world's seaborne oil trade and 20% of the world's liquefied natural gas (LNG) passed through it.

Overall, traffic through Hormuz in the last two months has run at about 5% of the pre-war average, leading to shortages of refined products, especially in Asia.

Before the start of the war, the UAE's production capacity had grown to 4.8 million bpd, but under its OPEC agreement, it was only allowed to produce 3.2 million bpd.

Experts say its departure from the cartel is unlikely to have an immediate impact on the market because the UAE's exports, like those of all its neighbouring countries, are currently constrained by Iran's control of the Strait of Hormuz.

Russia Stays Put Despite UAE Exit

According to the RSS articles, Russia will remain in the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, and welcomes the intention of the United Arab Emirates (UAE) to adopt a responsible stance in global energy markets after leaving the oil alliance, Kremlin spokesman Dmitry Peskov said on Wednesday. OilPrice.com reported that Russia will remain in the OPEC+ group alongside the remaining OPEC members and doesn't expect a price war following the abrupt exit of the United Arab Emirates, Russia's Deputy Prime Minister Alexander Novak said on Thursday.

Tanker Market Scrambles as War Upends Trade Flows

Bloomberg reported that increasing numbers of so-called clean tankers that transport fuels like diesel and gasoline are becoming dirty crude carriers as the impact of the war in Iran make switching more profitable, with some 68 long range-2 tankers having converted to carrying crude oil so far this year, compared with 49 for the whole of 2025. According to OilPrice.com, the war in Iran and the closed Strait of Hormuz are accelerating a major shift in the oil tanker market, in which smaller tankers carrying fuels are becoming crude carriers amid better economics as crude buyers scramble for supply that's not trapped behind the Strait.

The International Energy Agency reported that global oil supply plummeted by 10.1 mb/d to 97 mb/d in March, with continued attacks on energy infrastructure in the Middle East and ongoing restrictions to tanker movements through the Strait of Hormuz leading to the largest disruption in history.

Overall, global oil demand is estimated to contract by 800 kb/d year-on-year in March and by 2.3 mb/d in April.

U.S. LNG Exports Surge to Fill Supply Gap

The EIA reported that prices for natural gas in Europe and Asia have diverged from those in the United States since the February 28 closure of the Strait of Hormuz, with futures prices for liquified natural gas (LNG) delivery to the Title Transfer Facility (TTF), the European benchmark price, increasing to $14.80 per million British thermal units (MMBtu) for the week ending April 24, 35% higher than before the closure, while in East Asia, the front-month futures price for the benchmark Japan-Korea Marker (JKM), rose 51% over the same period to $16.02/MMBtu.

Natural Gas Intel reported that the United States has brokered a series of deals to send more LNG to Europe and back key infrastructure projects that could increase natural gas flows throughout the European Union (EU). According to OilPrice.com, the Association of Southeast Asian Nations (ASEAN) looks to ratify a petroleum security agreement as Asian nations are reeling from the shock oil supply crisis amid the Middle East war.

The closure of the strait has affected over 10 billion cubic feet per day (Bcf/d) of global LNG supplies, or approximately 20%, mostly from Qatar's Ras Laffan export facility.

Almost 90 percent of the LNG that transited the Strait of Hormuz in 2025 was destined for Asian countries.

Permian Producers Stay Cautious Despite High Prices

Despite oil prices surging amid the Iran crisis, U.S. producers are showing restraint. According to a new survey fielded by the Dallas Federal Reserve in mid-March, just 21% of oil executives in Texas and the surrounding states said they're planning to significantly increase the number of wells they plan to drill this year, while half of them said they're not planning to build more wells at all.

Garrett Golding, assistant vice president for energy programs at the Dallas Fed, said domestic producers have gotten more disciplined in reacting to market swings, noting "10 years ago, 15 years ago, they were more prone to chase higher prices with more activity. And we have a large graveyard of bankruptcies that are the result of that." According to market data, WTI Crude traded at $71.50/bbl on Wednesday, up 0.6%, while Brent Crude stood at $75.20/bbl, up 0.5%.

The Financial Times reported that US oil producers are in 'wait-and-see' mode as the Iran war energy crisis plays out, with the headline "Returns before rigs: why surging oil prices haven't sparked a Permian boom" capturing the industry's cautious stance.