UAE exit from OPEC and OPEC+ sparks mixed outlook for oil markets

Shafaq News- Baghdad

The United Arab Emirates’ decision to withdraw from OPEC and the OPEC+ alliance has drawn mixed reactions among specialists, amid close monitoring of global markets for producer compliance with output policies and the impact of geopolitical developments on supply and demand.

Oil expert Dirgham Mohammed Ali told Shafaq News that the UAE’s exit could lead to increased production outside the quota system, raising the risk of a significant supply surplus.

He warned that any unregulated rise in output would put strong downward pressure on prices, potentially leading to sharp declines or even a market collapse, particularly if other OPEC+ members show weak adherence to agreed production limits.

Ali explained that the oil market relies on a balance between supply and demand, noting that any disruption by a major producer such as the UAE would have immediate effects. “Iraq could be among the most affected countries, as more than 90% of its budget depends on oil revenues,” the expert noted.

Economic expert Mohammed Al-Hassani downplayed the potential impact, suggesting that the UAE’s withdrawal would not necessarily trigger a sharp price drop.

In remarks to Shafaq News, he said the market is influenced by multiple factors, including global demand, geopolitical tensions, and the ability of major producers, particularly Saudi Arabia, to stabilize supply through production adjustments. “The UAE may continue informal coordination with other producers, which could limit market disruptions,” he explained, clarifying, “While any price decline would affect Iraq, it is unlikely to result in a severe collapse.”