In an overarching strategic move that will significantly redraw the global energy map, the United Arab Emirates(UAE) has withdrawn from Organisation of the Petroleum Exporting Countries(OPEC), which is the world’s largest coalition comprising the energy bulwarks. This energy calculus of Abu Dhabi will fundamentally alter the energy security paradigm which is hitherto fractured, stimulated by the escalating conflict between the US-Israel-axis and Iran. West Asia being the energy powerhouse of the globe, the ongoing geopolitical conflict has led to serious fissures in the energy supply chain.
Oil tankers are bombed in the Strait of Hormuz, oil refineries across West Asia are attacked and ultimately oil prices are skyrocketing due to supply chain disruptions. Will the UAE exit from the OPEC impound further burden on the global energy security, will it escalate oil prices as one of the critical energy exporting bulwark has exited from the decision-making board and most importantly why did UAE decided to walk out of the OPEC. From New Delhi’s perspective, What does UAE’s energy calculus mean for India and are the country’s energy security stakes affected? Will India gain any diplomatic merit as an impact of the UAE’s decision? Let us decode!
OPEC: The mastermind behind global energy exporting calculus
Organisation of the Petroleum Exporting Countries(OPEC), is a coalition of oil exporting countries established in 1960. Its member-nations encompass 22 countries including Iran, Iraq, Saudi Arabia, UAE, Venezuela, Kuwait, Russia, Bahrain, Oman and other oil rich countries who produce or export petroleum products at humongous scale. The sole objective of the alliance is to ensure fair and stable oil prices, regulate the energy market and facilitate uninterrupted energy supply chains. It also ensures fair return for those who invest in the petroleum and its products industry. As of 2025, OPEC+ countries produce and export more than 50 per cent of the world’s oil and oil liquids. OPEC is thus a key pillar in ensuring global energy market stability.
Why UAE walked out of OPEC & the underlying strategic stakes
As UAE is one of the cornerstones in the OPEC, it is analysed that its withdrawal is set to significantly impact the energy landscape of the globe. On April 28, Tuesday, UAE announced that it will withdraw from the OPEC and OPEC+ oil cartels in cohesion with its national interests. The official statement from Abu Dhabi read, “This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile. During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all. However, the time has come to focus our efforts on what our national interest dictates”.
This decision indeed will significantly redefine the global energy security profile, thus has sent shockwaves across the geopolitical landscape which is struggling to dismantle from the repercussions of the US-Israel and Iran war. Experts assert that the sudden announcement of the UAE amidst an ongoing massive war in the region of West Asia, will pose a significant blow to the OPEC countries and also strains the comprehensive global energy security. The decision of UAE is also deemed as a strategic backlash to Saudi Arabia, another energy bulwark of the OPEC and a rival or strong competitor for UAE in the West Asian latitude.
From an analytical lens, it is said that though Abu Dhabi publicly claims the reason for exit as to protect “national interest”, the real energy calculus is far beyond. It can be the aim to seek energy hegemony in the region, espouse independent production and export strategy, increase its export scale and to have compounding impact on the energy market dynamics thereby earn huge profits without being accountable to the OPEC and its partners. The move also reflects a politically and strategically disintegrated West Asia with each country pulling in different directions amidst an intense war in the region.
What is the immediate reaction of the global oil market
As Abu Dhabi put its decision out, the immediate reaction from the oil market was it sent shockwaves all across the hitherto ruptured and volatile energy paradigm. The oil prices are spiking as the Strait of Hormuz is blocked, which is responsible for 1/5th of global oil supply. The war in the region, burning of oil refineries has further derailed the production capacity of the energy refineries. This has led to severe supply chain disruption and soaring prices. With Abu Dhabi’s decision, on April 28, oil prices jumped by more than 3 per cent.
The energy market was under panic and as per the US West Texas Intermediate(WTI) crude for June rose to USD 100.09 a barrel. On April 28, WTI futures rose above the USD 100 per barrel threshold for the first time since April 13. This inflationary oil price has caused a significant burden on the energy market and especially on the oil importing countries who have to fetch huge costs to meet their energy demands. The exit of UAE from OPEC+ will also have long-term consequences in reshaping the energy market dynamics which is under severe stress due to the emerging great power competition to control the energy landscape and seek hegemony.
Long-term impact on energy market & oil prices as UAE not bound to OPEC quota system
It is also said that the UAE exit from OPEC+ will have limited impact on the energy market and the oil prices in the short-term. Due to the US-Iran war, the oil rich countries are hitherto producing and exporting less. Thus, the UAE factor will not be outrightly visible. However, in the long-run, it will lead to a structurally weak OPEC+. UAE, being one of the largest contributors to the global energy market via OPEC ensured stability of the energy market and was a key pillar in the decisions. It acted as a market stabilizer and ensured fair prices. It brought balance among the oil producing and exporting nations and as an energy bulwark assured that no country achieves sole energy hegemony.
However, with the exit of UAE, OPEC+ may become weak and disruptive in terms of decision-making without a key player. Energy hegemony may tilt towards few players. Decision-making in terms of pricing and supply chain credentials may be oscillating leading to volatility of the energy market and oil prices. On the other hand, the UAE will also not be accountable to other energy partners in the coalition. It can produce and export oil without any vigilance. This will cause a ripple effect in the supply and pricing mechanisms. The nations which were hitherto operating under a single umbrella will now work distinctly thus, pull and push factor will work in the energy market, leading to intense competition and volatility in the energy market.
The oil production capacity is humungous. As per the reports, UAE 6,60,000 barrels a day. UAE’s state-run oil giant Adnoc has reiterated that, country’s oil production capacity is 4.85 million barrels per day. Thus, the UAE is operating at its fullest potential. Once the US-Iran war de-escalates and the Strait of Hormuz reopens and nations across the world replenish their energy imports, the real impact of the UAE exit surfaces as the nation is an energy giant that has the capability to influence the market. For example, OPEC has a quota system. It confined each nation’s production to a predetermined target. However, with the exit, Abu Dhabi is not accountable to such targets and can extend its sphere of influence in the energy market and generate huge profits.
The impact on India’s energy security trajectory as a net importer
India is one of the world’s largest energy importers that consumes 5.8 million barrels per day. 85 per cent of this consumption is imported. Analysing from the lens of strong bilateral bonhomie shared between India and UAE, the adverse impact on India is meagre. In fact, Abu Dhabi’s exit from OPEC+ will act as a strategic impetus to consolidate India’s energy security. With the strong Abu Dhabi-New Delhi ties, the energy deal can happen in a flexible format that yields greater supply at fair prices. UAE increasing oil production will further make global supply chain resilient thus stabilise prices and acts as an advantage to India. From New Delhi’s perspective, UAE’s exit from OPEC will not adversely affect, but indeed aid to furnish greater energy security.
If India is able to deal with UAE in a separate spectrum without being accountable to the OPEC caps, it gives greater leverage to de-risk from the volatilities of the energy market and ensure consistent energy supply with bilateral understanding, irrespective of the global energy conundrums. UAE can also trade oil to India via alternative routes surpassing the double blockade of the Hormuz. Refusing OPEC cap, UAE can spike production and route more oil to India via the Habshan-Fujairah pipeline, which is a land route. Also called the Abu Dhabi crude oil pipeline is a 380 to 406km stretch from the Hanshan oil fields of Abu Dhabi. It connects UAE and the Gulf of Oman via the land route thus, successfully surpassing the conflict-ridden Hormuz Strait as it directly reaches the Arabian Sea.
Thus, UAE’s increased energy capacity coupled with new import channels, will lend strategic advantage to India to consolidate the energy security, beyond all geopolitical hiccups. Amidst a fractured geopolitical landscape, India and UAE deem each other as credible and reliable partners, as India currently imports 9 to 10 per cent of its energy needs from UAE. Abu Dhabi gains access to the huge market of India and New Delhi can gain consistent energy supply at fair prices. The decision of the UAE to exit from OPEC is a smart strategic move that accelerates a fundamental shift in the energy security paradigm. However, for India, this will be an energy merit to meet national priorities beyond geopolitical upheavals.
