UAE Exits OPEC, Can Raise Output By 1 Million Barrels Daily

The United Arab Emirates’ decision to leave OPEC after nearly six decades marks a major shift in global oil supply dynamics. By stepping away from production quotas, the UAE gains flexibility to increase output, which could reshape energy markets and offer relief to major importers like India.

UAE’s Production Capacity

The UAE currently produces 3.2–3.4 million barrels per day, with an installed capacity of 4.2 million bpd. It is expanding capacity to 5 million bpd by 2027. Exiting OPEC allows Abu Dhabi to raise production by 0.5–1 million barrels per day immediately, potentially lowering global crude prices by $5–10 per barrel in the near term. 

Impact On India

India’s crude imports from the UAE have risen from $11 billion in FY2022 to nearly $14 billion in FY2026, with the UAE’s share in India’s total imports increasing from 10.3% to 11.4%. Higher supply could ease India’s oil import bill, stabilize fuel prices, and reduce inflationary pressures across transport, agriculture, and manufacturing sectors. 

Global Market Context

Analysts caution that while UAE’s move may soften prices, reduced coordination within OPEC could increase volatility. Global demand remains at 102–103 million bpd, meaning even marginal supply shifts can significantly influence prices. The UAE has pledged to continue cooperating with producers and consumers to maintain market stability. 

Key Highlights

•⁠  ⁠UAE to exit OPEC and OPEC+ effective May 1, 2026

•⁠  ⁠Can raise oil output by 0.5–1 million barrels per day immediately

•⁠  ⁠India’s crude imports from UAE rose to $14 billion in FY2026

•⁠  ⁠Potential $5–10 per barrel drop in global crude prices

•⁠  ⁠Analysts warn of possible price volatility due to reduced OPEC coordination

Sources: Firstpost, Business Standard, Market News & Analysis