The cartel can't hold its members together anymore
For nearly seven decades, OPEC has functioned as one of the world's most consequential economic institutions — a coalition of nations that learned, sometimes dramatically, that collective restraint over oil supply could reshape the fortunes of entire civilizations. The United Arab Emirates' decision to leave the cartel is not merely a bilateral dispute over production quotas; it is a signal that the architecture of coordinated scarcity, which once doubled oil prices overnight and brought Western economies to their knees, is giving way to a more fragmented and multipolar energy order. What began in 1960 as a sovereign counterweight to Western oil companies now finds itself outpaced by American shale fields, Russian pipelines, and the quiet ambitions of members who have long produced beyond their agreed limits. History rarely announces its turning points cleanly, but this departure may be one of them.
- The UAE — OPEC's fourth-largest producer at 3.1 million barrels daily — is walking away from the cartel, and analysts are using phrases like 'the beginning of the end' to describe what follows.
- Once free of production constraints, the Emirates could flood markets with an additional one million barrels per day, directly undermining the collective supply discipline that gives OPEC whatever pricing power it still holds.
- The cartel's grip was already slipping long before this exit: its share of globally traded crude has fallen from 52.5% in 1973 to just 36.7% by 2025, as the United States, Russia, Canada, and Brazil have reshaped the global supply map.
- A closed Strait of Hormuz has compounded the crisis, cutting Gulf exporters off from their own markets for eight weeks and shifting pricing leverage toward the United States, which exports without such constraints.
- OPEC will survive institutionally, but the departure of a founding-generation major producer leaves it materially diminished — an organization that can still convene, but can no longer reliably move the world's most traded commodity.
The United Arab Emirates is leaving OPEC, and the analysts who track such things are calling it a watershed. Not simply because one country is departing, but because of what the departure reveals: that the machinery holding the world's most powerful oil cartel together has been quietly failing for years, and may now be failing for good.
OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela with a straightforward logic — coordinate production, control supply, influence price. The strategy worked spectacularly in moments of crisis. The 1973 Arab oil embargo more than doubled prices and introduced fuel rationing across the Western world. The 1979 Iranian revolution sent a second shock through global markets. Even during the COVID-19 pandemic, OPEC+ slashed production to prevent a price collapse. The organization's power seemed almost unquestionable.
But fragility ran beneath the surface. Members routinely exceeded their agreed quotas, chasing market share at the expense of collective discipline. Kazakhstan and the UAE itself were repeat offenders. This chronic inability to enforce its own rules has eroded OPEC's effectiveness for decades — a structural weakness that no amount of emergency summitry could fully repair.
The UAE's exit sharpens that wound considerably. As OPEC's fourth-largest producer, pumping 3.1 million barrels daily, the Emirates could add roughly one million more barrels to global supply once free of cartel constraints — a volume large enough to meaningfully undercut any pricing strategy Riyadh might attempt to hold together.
The broader numbers tell the same story. OPEC controlled more than half of globally traded crude in 1973. By 2025, that share had fallen to 36.7 percent. The United States has been the world's largest producer since 2018. Russia, nominally part of the OPEC+ alliance, operates largely on its own terms. Canada and Brazil have claimed significant ground. The cartel's slice of the global pie has simply grown too small to dominate.
Geopolitics have accelerated the decline. The Strait of Hormuz has been effectively closed for eight weeks, blocking Gulf members from exporting the oil they produce and shifting pricing influence toward the United States, which faces no such constraints. In that context, the UAE's departure carries symbolic weight well beyond its production figures.
OPEC has survived wars, revolutions, and the collapse of member economies. But losing a major producer from its founding generation is something the organization has never truly absorbed. It will persist — but as a diminished institution, one that can still convene its members without being able to reliably move the commodity that once made it one of the most consequential economic forces on earth.
The United Arab Emirates is leaving OPEC, and analysts are calling it a watershed moment for an organization that has shaped global oil markets for nearly seven decades. The departure of a major producer from the cartel signals something deeper than a single country's business decision: it suggests the machinery that once held enormous sway over the world's energy supply is finally losing its grip.
OPEC was born in 1960 with a straightforward mission. Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela created the organization to coordinate oil production among the world's largest exporters, ensuring steady revenue streams and stable prices. The logic was simple: by controlling how much oil flowed to market, member states could influence what the world paid for it. Over the decades, the group expanded to include Algeria, Equatorial Guinea, Gabon, Libya, Nigeria, and the Republic of the Congo. In 2016, when prices collapsed, OPEC broadened its reach further by forming an alliance with ten additional producers, including Russia, to manage supply collectively.
The cartel's power was most visible during moments of geopolitical crisis. In October 1973, Arab oil producers imposed an embargo on countries supporting Israel during the Yom Kippur War, simultaneously cutting production. Oil prices more than doubled. Fuel rationing spread across the Western world. A second shock followed in 1979 when Iran's revolution disrupted supplies. More recently, when the coronavirus pandemic emptied the world's demand for oil, OPEC+ slashed production to prevent prices from collapsing entirely. The organization's ability to move markets seemed almost unquestionable.
But the cartel's actual power has always been more fragile than it appeared. Individual members frequently broke ranks, producing more oil than agreed quotas allowed in pursuit of larger market share, or producing less due to technical problems. Kazakhstan and the UAE itself have been repeat offenders. This chronic inability to enforce discipline among its own members has undermined OPEC's effectiveness for decades, according to analysts who track the organization's performance.
The UAE's position within OPEC made its departure particularly significant. In 2025, the Emirates ranked as the world's third-largest oil exporter, behind only Saudi Arabia and Iraq. As a producer, it ranked fourth within the cartel, pumping 3.1 million barrels daily. Once free of OPEC's production constraints, the UAE could increase output by roughly one million barrels daily—a meaningful addition to global supply that would further weaken the cartel's ability to manage prices through scarcity.
OPEC's declining relevance extends beyond any single member's exit. The organization controlled more than half of globally traded crude oil in 1973. By 2025, that share had shrunk to 36.7 percent. The United States has been the world's largest oil producer since 2018, generating 13.6 million barrels daily. Russia, though part of the OPEC+ alliance, produces 9.1 million barrels daily and operates largely independently. Non-OPEC nations like Canada and Brazil have captured significant market share. The cartel's slice of the global pie has simply grown smaller, and with it, its leverage over prices.
Current geopolitical events have accelerated this erosion of power. The Strait of Hormuz, through which roughly one-fifth of the world's oil normally flows, has been effectively closed for eight weeks, preventing Gulf members from exporting the oil they produce. This blockade has shifted pricing influence away from OPEC toward the United States, which faces no such export constraints. In this environment, the UAE's exit carries symbolic weight beyond its immediate production numbers.
Analysts describe the moment in stark terms. One called it "the beginning of the end of OPEC." A Swiss private banker described it as "the end of OPEC as we knew it." The cartel has weathered the Iran-Iraq War and Venezuela's economic collapse, but losing a major producer from its founding generation represents something the organization has never truly survived. OPEC will continue to exist, but with materially diminished ability to set the prices that once made it one of the world's most consequential economic institutions.
Citas Notables
The beginning of the end of OPEC— Unnamed analyst quoted in reporting
OPEC will continue, but with materially less ability to set prices— Charles-Henry Monchau, CIO of Syz Group
La Conversación del Hearth Otra perspectiva de la historia
Why does it matter that the UAE is leaving? They're just one country.
Because the UAE isn't just any member—it's a founding-era major producer. OPEC has survived wars and revolutions, but it's never really lost a producer of that caliber. It signals the whole structure is coming apart.
But OPEC's share of global oil has been shrinking for decades anyway. Isn't this just one more crack in an already weakening wall?
Exactly. The wall was already cracked. The US produces more oil than Saudi Arabia now. Russia operates independently. OPEC controlled over half the world's oil in 1973—now it's 37 percent. The UAE leaving is less about the UAE and more about confirming what's already true: the cartel can't hold its members together anymore.
What does the UAE gain by leaving?
Freedom. Right now, OPEC members agree on production limits to keep prices stable. Once out, the UAE can pump an extra million barrels a day. More supply means lower prices for buyers, higher revenue for the UAE if it can move volume. It's a bet that going alone is more profitable than staying constrained.
Can OPEC actually enforce its agreements?
Historically, no. Members break ranks constantly. Kazakhstan and the UAE itself have produced more than their quotas allowed. When you can't enforce your own rules, your power evaporates. That's been OPEC's chronic problem.
Does the Strait of Hormuz blockade change anything about this?
It accelerates it. Right now, Gulf producers can't export anyway because the strait is closed. So losing the UAE's cooperation doesn't immediately hurt supply. But it shows that geopolitics and geography matter more than OPEC's coordination. The US, which has no export constraints, is now the one influencing prices.
So what happens to OPEC now?
It persists, but as a much weaker institution. It will continue to exist, but with materially less ability to set global oil prices. It's the difference between being a cartel that shapes markets and being a club of producers trying to coordinate in a world that's moved on.