Jeddah : The decision by the United Arab Emirates to exit the Organization of the Petroleum Exporting Countries (OPEC) is being viewed as a major turning point for the global oil industry, with analysts pointing to long-term structural changes already reshaping energy markets.
According to a report by Julius Baer titled “New Oil: Breakaway During the Queen Stage”, the move reflects a strategic shift that has been developing over several years.
The UAE has increasingly focused on expanding its oil and gas production capacity, often diverging from OPEC’s approach of limiting supply to support prices.
Control Over Production
With its exit, the UAE gains full autonomy over its output decisions, allowing it to maximize returns on its investments in energy infrastructure.
Norbert Rücker, Head of Economics & Next Generation Research at Julius Baer, stated, “By leaving OPEC, the UAE gains the flexibility to monetise its investments in oil and gas production without being constrained by collective supply restrictions.”
This increased independence is expected to gradually boost global supply, as the UAE continues to expand upstream production and liquefied natural gas (LNG) capabilities.
OPEC’s Influence remains
Despite the development, the report suggests that OPEC’s core influence may not weaken immediately. Saudi Arabia is expected to continue leading policy direction within the group.
However, the UAE’s departure highlights internal differences among member countries, particularly between those prioritizing production growth and those focused on maintaining higher oil prices through supply controls.
Energy Market
The report emphasizes that the broader transformation of the oil market goes beyond OPEC. Increasing competition from U.S. shale producers, South American offshore projects, and the global push toward cleaner energy is reshaping demand and supply dynamics.
“The real challenge is not the UAE’s exit, but the structural shifts in the oil market rising competition, new supply sources, and evolving demand patterns.” Rücker noted
The growing adoption of electric vehicles and alternative fuels is also contributing to a slowdown in long-term oil demand growth.
Oil Prices
Analysts expect oil prices to stabilize rather than surge.
“The market is moving toward a setting of ample supply and stronger competition, which should keep oil prices anchored in the high $60 per barrel range.” states report
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At the same time, geopolitical tensions particularly involving Iran could still trigger short-term volatility, while economic slowdowns may place downward pressure on prices.
A Shift beyond Cartels
The UAE’s move is widely seen as part of a broader transition toward a more market-driven oil system. As global energy dynamics evolve, the balance of power may shift away from coordinated cartel control toward competition led pricing and supply strategies.
Analysts say this development could redefine how oil markets operate in the coming years, marking a gradual but significant shift in the global energy order.