On Tuesday 28 April 2026, the UAE said it will leave OPEC and OPEC+, with effect from 1 May. Brent still rose nearly 4% that day, as tension linked to the Strait of Hormuz drew more attention than the exit.
The note says Saudi Arabia now carries more of the task of managing supply within the group. It also says the market is watching whether other producers could leave after the UAE.
Opec Plus Supply Management
OPEC and partner countries have agreed to raise output by about 188,000 barrels per day in June. The report says this move signals that the group’s approach remains in place, despite the UAE’s departure.
It adds that the planned rise is not expected to drive prices given limits on exports. These include operational issues and the effective closure of the Strait of Hormuz.
The departure of the UAE from OPEC, effective May 1st, should have been a fundamentally bearish signal for oil prices. However, we saw Brent crude jump nearly 4% on the day of the announcement last week. This tells us that the market is overwhelmingly focused on geopolitical tensions over supply fundamentals.
The effective closure of the Strait of Hormuz is the single most important factor for traders to watch right now. We know that looking back at 2025, this chokepoint was responsible for the transit of roughly one-fifth of the entire world’s oil supply. The oil volatility index, or OVX, has reflected this risk by spiking to over 65, a level not seen in more than a year, suggesting that sharp price swings are likely to continue.
Market Positioning And Volatility
We believe the announced OPEC+ production increase of 188,000 barrels per day is largely irrelevant in the current environment. This volume is a drop in the bucket compared to the millions of barrels per day now facing extreme logistical uncertainty. The burden now falls entirely on Saudi Arabia, whose spare capacity is estimated to be under 2 million barrels per day, providing a thin buffer against a sustained crisis.
For the coming weeks, derivative traders should position for continued price strength and elevated volatility. The options market is already pricing in this risk, with implied volatility on near-term call options showing a significant premium over puts. This indicates that strategies protecting against, or profiting from, a sharp move higher are being favored.
The current situation is creating a floor for prices, as any hint of de-escalation could be temporary. Looking at historical supply disruptions, such as the drone attacks we saw in 2025, the initial price spike is often just the beginning of a longer, more volatile trend. We expect Brent to test resistance levels above $110 per barrel before the end of June.
