The United Arab Emirates announced it would withdraw from OPEC and the wider OPEC+ alliance, effective May 1, removing the group's third-largest producer in a stunning move that reshapes global oil politics. The shock announcement Tuesday comes after the UAE was the target of missile and drone attacks for weeks by fellow OPEC member Iran , according to CNBC.

The UAE came to the conclusion that exiting the group was in its national interest following a comprehensive review of its production policy and capacity, the Energy Ministry said in a written statement. Energy Minister Suhail Al Mazrouei subsequently 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. The departure comes as 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 , according to reports.

The UAE has the ambition to achieve 5 million barrels per day of capacity by 2027 and wants more freedom of action to pursue that goal , Al Mazrouei said. 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 , Al Jazeera reported.

Oil Prices Whipsaw on Escalation Fears

International benchmark Brent crude futures were down 3.2% to $114.22 per barrel by 9:53 a.m. ET, after surging to a wartime high of $126 earlier in the trading session , CNBC reported on Thursday. Axios reported that the U.S. Central Command was set to present Trump plans for a possible military action against Iran, citing two sources with knowledge of the matter. Trump had earlier reportedly rejected Tehran's proposal to reopen the Strait of Hormuz, signaling the naval blockade will remain in place until a broader nuclear agreement is reached.

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%. However, Brent crude futures climbed above $112 per barrel on Thursday, rallying nearly 15% so far this week as the ongoing Middle East conflict kept the Strait of Hormuz effectively closed, cutting off significant volumes of global energy flows. Tensions remain elevated despite a ceasefire holding since early April, as US and Iranian blockades have effectively shut the Strait of Hormuz, cutting off a major share of global oil flows and driving what the International Energy Agency has called an unprecedented supply shock.

Iran gave the U.S. a new proposal to reopen the Strait of Hormuz and end the war, with nuclear negotiations postponed for a later stage , Axios reported. But two months after the U.S. and Israel launched the war on Iran, efforts to negotiate a deal with the Iranians appear deadlocked, dampening hopes of ending a conflict that killed thousands of people and disrupted global energy supplies , NPR reported.

U.S. LNG Exports Surge to Fill Supply Void

As Middle East supplies remain constrained, U.S. liquefied natural gas exports are stepping in to fill the gap. US LNG exporters are on track to ship record April volumes. By the end of the month, US export volumes are poised to reach 10.15 million tons (Mt) , according to Natural Gas Intel citing Kpler data.

The United States announced new agreements aimed at expanding LNG exports and natural gas infrastructure across Central and Eastern Europe during the Three Seas Initiative Summit in Croatia. The deals include support for pipeline development and regional gas interconnections designed to increase capacity for importing U.S. LNG into Europe.

Among the projects is the Southern Interconnection pipeline linking Bosnia and Herzegovina with Croatia, which would provide additional access to LNG supplies and diversify regional gas sources , Pipeline & Gas Journal reported.

According to market data, Henry Hub Natural Gas traded at $3.25/MMBtu on Wednesday, down 2.4% as traders anticipated a seasonally high storage print. Natural Gas Intel reported that TotalEnergies said about 15% of its oil and natural gas production in the Middle East remains offline and didn't offer a timeline for restarting the output as conflict continues there with no end in sight .

Woodside Struggles With Louisiana LNG Sales

In another development highlighting market disruption, Reuters reported that Woodside Energy is struggling to sell LNG volumes from its Louisiana LNG plant under construction. The Australian energy company made a final investment decision on the 16.5 million tonnes per annum project in April 2025, with first LNG targeted for 2029. Stonepeak will contribute $5.7bn to the project, covering 75% of the capital expenditure in 2025 and 2026. Woodside's share of the anticipated total capital expenditure is $11.8bn , according to NS Energy.

The Trion oil project is 56% complete and aiming for first oil in 2028, while Louisiana LNG Train 1 is 31% complete. Beaumont New Ammonia shipped its first cargo in February and moved to full operational control in March , according to Woodside's Q1 2026 filing.

OPEC+ Vows to Continue Despite UAE Exit

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 , according to Xinhua. One of the RSS articles noted that Russia says OPEC+ will continue after the UAE exit, with no price war expected.

The move is seen as a major blow to the Vienna-based oil cartel – but will not spell the end of it altogether, observers say , Al Jazeera reported. Today, as other countries – such as the US and Norway – have become big oil producers themselves, OPEC's share is lower at 33 percent of the global market .

The energy crisis continues to ripple through global markets, with US inventory data showing steep declines in crude and fuel stockpiles, while exports surged to record levels above 6 million barrels per day, signaling tightening global supply conditions amid ongoing geopolitical disruption , according to Trading Economics.