UAE to Leave OPEC in 2026: Analysts Warn of Oil Price Volatility and Revenue Risks for Nigeria
The planned withdrawal of the United Arab Emirates (UAE) from the Organization of the Petroleum Exporting Countries (OPEC) is raising concerns among energy analysts, who warn the move could weaken the group’s influence over global oil prices and create risks for oil-dependent economies such as Nigeria.
The UAE is set to exit the alliance on May 1, 2026, a decision that will remove an estimated 1.2 billion barrels of annual crude output from OPEC’s coordinated supply framework.
In 2025, the country produced an average of 3.36 million barrels per day, representing about 12% of the cartel’s total output.
Analysts caution that the departure of one of OPEC’s most consistent quota-compliant members could undermine the group’s ability to regulate supply and stabilise prices, potentially increasing volatility in global oil markets.
Energy economist Wumi Iledare said the move highlights deeper structural tensions within the broader OPEC+ alliance.
He noted that countries that have significantly expanded production capacity are under increasing pressure to maximise output rather than adhere to collective production limits.
“The speculation around a possible UAE exit points to a deeper structural issue growing tension between expanded production capacity and quota constraints.
If this trend continues, OPEC’s ability to enforce discipline may gradually weaken,” Iledare said.
He added that Nigeria faces a dual challenge in a less coordinated market, including the risk of falling oil prices and persistent domestic inefficiencies.
“Domestic underperformance production shortfalls, high costs, and operational leakages limits Nigeria’s ability to benefit even when prices are favourable,” he explained.
Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise, said the UAE’s exit is more likely to disadvantage Nigeria than create new opportunities.
“The UAE’s departure could weaken OPEC’s ability to influence prices. With fewer constraints, the UAE may increase output, potentially putting downward pressure on global prices,” Yusuf said.
He cautioned that even if Nigeria receives a higher production quota, any potential gains could be offset by declining prices.
“We may have a higher quota, but at a lower price,” he noted, warning of a “double setback” if Nigeria fails to increase production while prices fall.
On the international stage, Saul Kavonic, head of energy research at MST Financial, described the development as a potential turning point for OPEC.
“This could mark the beginning of the end for OPEC as we know it,” he said, pointing to declining cohesion and reduced collective capacity within the group.
The UAE, which has been a member of OPEC since 1967, said its decision followed a strategic review of its long-term energy priorities.
The country signalled its intention to pursue greater production flexibility while maintaining a responsible role in global energy markets.
The move comes at a time of heightened geopolitical tensions in the Middle East, particularly around the Strait of Hormuz, a critical route for global oil shipments.
These dynamics are adding to concerns about potential supply disruptions and increased price volatility.
For Nigeria, the risks are compounded by longstanding structural challenges, including oil theft, pipeline vandalism, and underinvestment in the sector.
Meanwhile, OPEC+’s share of global oil supply has been gradually declining, reflecting a broader shift in market dynamics.
Founded in 1960, OPEC has historically played a central role in stabilising oil markets through coordinated production policies.
However, internal divisions and shifting national priorities have increasingly strained the alliance.
With the UAE’s departure, analysts say Nigeria’s ability to navigate a more competitive and less predictable oil market will depend less on OPEC coordination and more on domestic reforms aimed at improving production efficiency and reducing reliance on crude oil exports.
