The decision by the Organisation of the Petroleum Exporting Countries to absorb the shock of a major member's departure is colliding with fresh warnings from the United Nations Conference on Trade and Development that the ongoing Middle East conflict is morphing into a broader economic threat.
Oil prices climbed back above $110 per barrel on Tuesday, amid a lack of progress in reopening the vital Strait of Hormuz. The White House has refused to say if President Donald Trump is inclined to accept Iran's latest proposals to end the two-month-old conflict and reopen the crucial waterway, which would reportedly put off talks on Tehran's nuclear programme.
UAE's Strategic Exit
The United Arab Emirates said it would withdraw from OPEC and the wider OPEC+ alliance from May 1, ending nearly six decades of membership and removing one of the group's largest producers. Pumping roughly 2.9 million barrels per day, the UAE had accounted for a significant share of OPEC+ supply and now plans to ramp up capacity to 5.0 million barrels per day outside quota constraints.
This development raises more questions over the ability of OPEC to maintain its role in geopolitics and market stability. A number of countries, including Qatar, had earlier left OPEC, weakening its influential capacity. UAE Energy Minister Suhail Mohamed al-Mazrouei described the move as a strategic policy shift aligned with long-term production goals. He indicated the decision was taken unilaterally, without consultation with key partners such as Saudi Arabia, widely seen as OPEC's de facto leader.
Widening Fissures in OPEC+
The exit shows widening fissures within OPEC+, already under strain from the war involving Iran and its regional spill-overs. According to stakeholders, the development signals trouble, especially loss of more high-capacity Gulf producers, weakening the group's ability to manage supply and stabilise prices, particularly as other members had previously exited, citing quota frustrations and shifting national priorities.
Data from the International Energy Agency show OPEC+'s share of global oil output slipped to 44 per cent in March from about 48 per cent in February, with further declines expected as disruptions intensify. Qatar cautioned against the possibility of a "frozen conflict" in the Gulf, as talks between the United States and Iran for a peace deal appeared to have deadlocked.
Oil Market Reaction
Oil prices rallied, with Brent crude for June delivery rising 2.8 per cent to $111.26 a barrel. The benchmark U.S. contract, West Texas Intermediate, for June delivery, rose 3.4 per cent to $99.62 per barrel. Hopes for a deal had been rising going into last weekend but Trump dashed them on Saturday by scrapping a planned trip by his envoys, Steve Witkoff and Jared Kushner, to Islamabad.
"Right now, the market is not optimistic about the chance of a deal to reopen the Strait due to Iran's request to push discussions about nuclear disarmament into the future," said Kathleen Brooks, research director at XTB trading platform.
Rystad Energy analyst Jorge Leon said the UAE move is significant as it is, alongside Saudi Arabia, one of the few nations with significant spare production capacity. "While near-term effects may be muted given ongoing disruptions in the Strait of Hormuz, the longer-term implication is a structurally weaker OPEC and potentially more market volatility."
Nigeria's Output Hits Five-Year High
The Nigerian National Petroleum Corporation Limited released a one-year scorecard covering April 2025 to April 2026, stating that crude oil output, including condensates, rose to 1.71 million barrels per day, the highest level in five years. The report noted that NNPCL recorded notable gains in crude production, gas infrastructure, and refinery restructuring within its first year of operating under a renewed mandate. Its upstream subsidiary, NNPC E&P Limited, reached a peak production of 365,000 barrels per day in December 2025.
On upstream reforms, NNPCL highlighted progress in production sharing contracts, noting that it successfully executed a model PSC for oil mining leases PPL 2000 and 2001. The agreements are expected to unlock investment in deepwater non-associated gas development.
