The UAE Withdrawal from OPEC Shakes Power Dynamics, Putting Saudi Dominance to the Test

BlockBeats News, May 4th. The UAE announced its withdrawal from OPEC, taking away approximately 12% of production and the second-largest idle capacity after Saudi Arabia. This has raised dual concerns in the market regarding supply and organizational stability. With disruptions in the Hormuz Strait and the backdrop of the Iran conflict, global oil supply was already under pressure, and this move further undermines OPEC+'s regulatory capacity.

Saudi Energy Minister Abdulaziz bin Salman has long relied on production capacity and royal status to lead decision-making, with the support of Crown Prince Mohammed bin Salman. However, in recent years, his decision-making style has become more centralized, shrinking the negotiating space among member countries and causing dissatisfaction, including from the UAE.

The UAE and Saudi Arabia have been in dispute over quotas for many years. Despite Abu Dhabi receiving a quota increase in the past, it has not fundamentally eased the conflict. UAE Energy Minister Suhail al-Mazrouei has previously publicly criticized the quota mechanism as "unfair" and has been promoting production expansion plans.

Analysts believe that in the short term, the UAE's withdrawal will have a limited actual supply impact due to geopolitical conflicts. However, once transportation and production resume, its unconstrained production capacity will become a key variable. Coupled with the weakening of internal coordination mechanisms, the future stability of OPEC+ and Saudi Arabia's dominant position face significant uncertainty.