By Our Special Correspondent
The decision by the United Arab Emirates to withdraw from the Organization of the Petroleum Exporting Countries marks a turning point in the global oil market, coming at a time of heightened geopolitical tension in the Middle East. As one of OPEC’s largest producers, the UAE’s exit weakens the cartel’s ability to coordinate supply and stabilize prices, raising the prospect of increased competition among oil-producing nations. Analysts say the move could encourage higher production levels outside OPEC quotas, potentially lowering prices in the long term but also undermining the cohesion that has historically shaped global oil markets. The move is widely viewed as strategic rather than purely circumstantial, with the UAE seeking greater autonomy over its production decisions and long-term revenue planning, particularly after years of quota disputes and growing alignment with U.S. energy interests.
The development coincides with the ongoing conflict involving the United States, Israel, and Iran, which has led to the effective closure of the Strait of Hormuz—a chokepoint through which about 20 percent of global oil and gas supplies normally pass. The disruption has sent oil prices surging and significantly reduced shipping activity, with only a handful of vessels now transiting the route daily compared to pre-war levels. Reflecting global concern, Joe Biden recently warned that “any prolonged disruption in the Strait of Hormuz will have far-reaching consequences for global energy security and economic stability,” underscoring the stakes for both producers and consumers.
For the United States, however, the crisis presents strategic gains. Washington’s naval pressure on Iranian exports and its broader military posture have tightened constraints on Tehran’s oil-dependent economy, limiting exports and weakening Iran’s bargaining position in negotiations. At the same time, higher global oil prices benefit American shale producers, allowing the U.S. to expand its market share and strengthen its position as a leading energy exporter. The UAE’s potential shift toward independent production policies could further align with U.S. interests by increasing global supply outside OPEC’s traditional framework. Notably, the UAE and the U.S. have maintained a long-standing strategic and economic partnership, particularly in energy and security cooperation, an alignment that analysts believe may have subtly influenced Abu Dhabi’s calculus, positioning the exit as both a strategic realignment and a hedge for economic survival amid shifting global dynamics. Crucially, this shift may also indirectly affect Iran’s war posture: a weakened OPEC and the prospect of increased non-OPEC supply over time could erode Iran’s ability to leverage high oil prices as a wartime advantage, potentially pressuring Tehran toward negotiations if revenues decline, even as short-term supply disruptions continue to give it leverage. Echoing the broader geopolitical stakes, Benjamin Netanyahu stated that “ensuring stability in global energy routes is critical not just for our region but for the world economy.”
Nigeria, Africa’s largest oil producer, faces a mixed outlook amid these developments. On one hand, elevated oil prices driven by the Hormuz crisis could boost government revenues and foreign exchange earnings. On the other, a weakened OPEC and the possibility of price competition—especially if countries like the UAE ramp up production once export routes reopen—may erode long-term price stability and Nigeria’s influence within the cartel. Additionally, disruptions in global shipping and insurance costs could complicate Nigeria’s export logistics, while heightened global uncertainty may deter investment in its already fragile oil sector.
For oil-producing countries worldwide, the combined effect of OPEC fragmentation and geopolitical conflict signals a shift toward a more fragmented and unpredictable energy order. The traditional mechanisms of supply coordination are under strain, while strategic chokepoints like the Strait of Hormuz have once again proven their vulnerability. This raises the likelihood of more regionalized energy markets, increased competition, and heightened geopolitical risk premiums in oil pricing. As Antonio Guterres cautioned, “the world cannot afford another prolonged energy crisis driven by conflict and division,” calling for urgent diplomatic efforts to stabilize both the region and global markets.
The conflict underpinning these changes began on February 8, 2026, when U.S. and Israeli forces launched coordinated strikes on Iranian strategic assets, with the stated aim of curbing Iran’s nuclear ambitions and limiting its regional military influence. In response, Iran shut down the Strait of Hormuz and launched retaliatory actions across the region, triggering a broader crisis in global energy supply. While intermittent diplomatic efforts have sought to de-escalate tensions, progress remains limited, with ongoing disruptions to oil flows and fragile ceasefire attempts defining the current phase of the conflict.