Rabobank’s energy team reports that the UAE leaving OPEC after six decades could weaken the cartel and support structurally lower oil prices. The move would give the UAE full control of production and allow it to use its spare capacity without OPEC limits.
The text says the UAE could raise output to seek higher economic returns, fund non-oil plans, and position itself as a high-volume supplier. It also links the shift to new US swapline and defence ties, which could support faster production increases.
Uae Output Shift And Price Impact
The article states the UAE exit could raise overall oil supply and reduce energy prices after the Iran War is over. It adds that the change may encourage wider cartel break-up.
It raises uncertainty over where extra UAE oil would go, including whether sales would favour geopolitical allies and their preferred partners. It also describes a possible move towards separated energy groupings across OPEC, NOPEC producers, and emerging “energy stacks”.
The piece notes it was produced using an AI tool and reviewed by an editor.
Looking back at the analysis from 2025, the prediction of the UAE leaving OPEC has now largely played out, creating significant pressure on crude oil prices. The UAE has indeed ramped up its output, with recent data from early May 2026 showing its production consistently topping 3.8 million barrels per day. This sustained increase in supply is a key reason we’ve seen prices soften over the last several months.
Market Positioning And Key Risks
We see West Texas Intermediate struggling to hold above $72 a barrel, a direct consequence of this new supply dynamic and a sluggish economic recovery in Asia. This contrasts sharply with the post-Iran War highs of over $90 that we saw back in late 2024. The market is now pricing in a sustained period of higher-than-expected global inventories.
For the coming weeks, we believe traders should consider buying put options to protect against a further slide in prices. The market appears heavy, and a break below the $70 support level could easily see a quick move toward the mid-$60s. This strategy offers a defined-risk way to position for the continued downside pressure from non-OPEC supply growth.
The geopolitical fragmentation that was forecast is also becoming a reality, increasing market volatility. We saw implied volatility on crude options spike after the UAE announced a new long-term supply agreement with India last month, bypassing traditional spot markets. This suggests traders must now account for these “energy stack” deals, which can suddenly shift supply away from the global pool.
This makes watching futures spreads critical, especially the Brent-WTI spread, to gauge how these regional supply deals are affecting different benchmarks. A widening spread could signal that Europe is more exposed to OPEC+ production cuts while the US market is better supplied. We anticipate these regional price dislocations will become more common.
The main counter-risk to this bearish view remains the response from Saudi Arabia and the remaining OPEC+ members. We are watching their upcoming June meeting very closely for any signs they are willing to cut production more aggressively to defend prices. Any hawkish statements from Riyadh would be a signal to reduce short positions, as they still hold the power to significantly tighten the market on short notice.
