Before the Iran war, the UAE produced 3.4 million barrels per day (b/d) of crude oil. It accounted for around 12% of total OPEC output. However, its production capacity has increased to about 4.85 million b/d.

In recent years, the UAE has expressed frustration with OPEC production quotas limiting its output. In 2024, the country’s average crude oil production dropped to 2.95 million b/d due to disruptions caused by the Iran war.

The Iran conflict has severely impacted oil production across the region. Reports indicate a 44% slump in UAE production due to the closure of the Strait of Hormuz. Moreover, 7.88 million barrels of OPEC’s production were wiped out in March as a direct result of this war.

The UAE’s departure from OPEC may lead to further fracturing among remaining members. Analysts suggest that this exit is a blow to OPEC’s influence in the oil market.

The UAE has been politically aligned with Israel and has shown hostility towards Tehran. Its exit is expected to strengthen relationships with the US.

Discussions about leaving OPEC have occurred behind closed doors for several years. The timing of this decision reflects ongoing intra-Gulf disputes over responses to regional conflicts.

Dr. Ebtesam Al-Ketbi stated, “The UAE is redefining its role from a producer within a bloc to a balancing producer that contributes to market stability through its ability to act.” Will Wechsler noted, “It is easy to understand why policymakers in the UAE are no longer interested in being part of this organization.”

Landon Derentz added, “The UAE’s decision to leave OPEC marks a symbolic political blow to the organization’s perceived influence.”

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The UAE joined OPEC in 1967 and remained a member when the UAE was formed in 1971. The exit comes during an energy crisis exacerbated by the ongoing Iran war.

In recent months, Brent crude oil prices have soared, reaching as high as $119.50 a barrel. The price increase reflects tensions in the energy market and challenges faced by Gulf producers.

OPEC Gulf producers have struggled to ship exports through the Strait of Hormuz due to Iranian threats. Anwar Gargash, a prominent political figure, noted that the Gulf Cooperation Council countries supported each other logistically but lacked political and military strength historically.

Gargash stated, “I expect this weak stance from the Arab League and I am not surprised by it, but I haven’t expected it from the [Gulf] Cooperation Council and I am surprised by it.” This highlights concerns over regional security and cooperation.

Donald Trump has criticized OPEC for inflating oil prices. His stance aligns with the UAE’s exit, which some view as a victory for his administration. The UAE criticized fellow Arab states for not doing enough to protect it from Iranian attacks.

This sequence of events indicates a changing landscape in global energy dynamics. The next steps for both OPEC and the UAE remain uncertain as geopolitical factors continue to influence oil prices.

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Before the recent escalation in the US-Israel conflict with Iran, crude oil prices were relatively stable, hovering just above $60 a barrel at the start of the year. However, the situation has dramatically changed since the launch of joint strikes on Iran on February 28, 2026.

As a result of the conflict, crude oil prices surged past $100 a barrel for the first time since Russia’s invasion of Ukraine in 2022. Brent crude rose more than 20 percent, topping $114 a barrel, while West Texas Intermediate (WTI) benchmark prices increased by 28.7 percent to $119.96 per barrel.

This surge in oil prices is largely attributed to Iran’s actions, which have effectively brought shipping in the Strait of Hormuz to a halt. This strait is crucial for global oil transport, with roughly 15 million barrels of crude oil typically shipped daily, and its closure threatens about one-fifth of the global oil supply.

In the immediate aftermath of the strikes, oil prices skyrocketed by about 50 percent, reflecting the market’s reaction to the heightened geopolitical tensions. Brent crude jumped 26.3 percent to $117.08 per barrel as trading began in Asia Pacific markets.

Experts are weighing in on the implications of these price increases. The International Monetary Fund has noted that every sustained 10 percent rise in oil prices results in a 0.4 percent rise in inflation, indicating that consumers may soon feel the effects of these rising costs.

Former President Donald Trump commented on the situation, stating, “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace.” This perspective highlights the complex interplay between energy prices and national security considerations.

On the other hand, an IRGC spokesperson warned, “If you can tolerate oil at more than $200 per barrel, continue this game,” suggesting that the conflict could lead to even higher prices if it persists.

Industry leaders are also expressing concern. Saad al-Kaabi remarked, “Everybody that has not called for force majeure we expect will do so in the next few days that this continues,” indicating that the situation may worsen if the conflict does not de-escalate soon.

Details remain unconfirmed regarding the duration of the conflict and its long-term impact on oil prices. Predictions for future prices vary widely, with estimates ranging from $150 to $200 per barrel, reflecting the uncertainty in the market.

As the situation develops, the global oil market remains on edge, with stakeholders closely monitoring the conflict’s impact on supply and prices.

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