The UAE has frequently clashed with its fellow OPEC and OPEC+ producers over quotas. J.P. Morgan analysts stated that the UAE’s exit would not lead to any significant change in the immediate term due to the blocked Strait of Hormuz, which prevents Gulf producers from increasing output.

The UAE has been working to boost its crude oil production capacity to 5 million barrels per day (bpd) by 2027. Last year, the UAE accounted for over 11% of OPEC’s oil production.

The exit of the UAE could reduce OPEC’s ability to stabilize global oil markets. The ongoing crisis in the Strait of Hormuz has led to massive shut-ins of oilfields across the Middle East, with losses estimated at around 10 million bpd.

J.P. Morgan noted that the UAE would theoretically have the ability to pump an additional 1.5 million bpd of crude above current levels if conditions allow.

Barclays indicated that the UAE is set to grow its oil production faster when the current Hormuz crisis is over. Amrita Sen added that the ability of OPEC to influence oil prices does not change with the UAE’s exit.

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