The fraying of the relationship between the United Arab Emirates and Saudi Arabia is at the center of Abu Dhabi’s bombshell decision to leave OPEC.
The rivalry had been building for years, but it was the side effect of the United States and Israel’s war against Iran that opened space for Tuesday’s announcement (the 28th), according to sources familiar with the matter to Bloomberg. In practice, it was as if the “younger brother” had decided it no longer wanted to live in the shadow of the “older brother.”
And the thing doesn’t stop at OPEC. The Emirates are also reevaluating their participation in two regional bodies where Riyadh wields substantial influence, according to the same sources, who spoke on condition of anonymity.
Although nothing is yet sealed, Abu Dhabi is studying “freezing” its seat in the Arab League, headquartered in Cairo, and taking a similar stance toward the Organization of Islamic Cooperation, based in Jeddah.
Also on the radar is the future of the Emirates within the Gulf Cooperation Council (GCC), a bloc of six Gulf countries. On Wednesday (29), Abu Dhabi made a point of saying that it remains committed to the group. But the presidential diplomatic adviser Anwar Gargash had already said earlier in the week that the GCC is living “the weakest moment in history.”
A UAE official said the country is reviewing how sensible it is to remain active in several multilateral bodies, but for now it is not discussing formal exits.
It is true that none of these three organizations has “hard power” — they do not send troops, they do not impose sanctions on their own. But any rupture would make visible the size of the Emirates’ frustration with other Arab countries, especially with neighboring Saudi Arabia, in light of what they see as a lack of solidarity in a landscape of military and economic challenges since the start of Israel’s war against Hamas in 2023.
Officially, the OPEC departure was sold as an economic decision, looking ahead to the country’s production needs. The Emirates are able to produce far more than the cartel’s current quota allows and did not want to have to “seek blessing” from the Saudis to use that additional capacity, according to a source aware of the discussions in Abu Dhabi. In addition, with the Strait of Hormuz closed, global supply is so tight that no one in the government believes there will be a meaningful drop in prices in the short term.
Another point: in Abu Dhabi, the reading is that global demand for oil should begin to fall because of the energy transition sooner than Riyadh imagines. The logic is simple — if the end of the cycle is closer, better to monetize the reserves as soon as possible.
At the same time, the decision was the clearest signal so far that the Emirates no longer want to hide their ambitions, nor be limited to the political and security umbrella of Saudi Arabia — which is the largest Arab economy and sees itself as the natural leader of the Muslim world.
“We are building a different economic model, and that requires a new political alignment and a reconfiguration,” sums up Nadim Koteich, a consultant who advises various UAE government bodies.
The move by Sheikh Mohammed bin Zayed (MBZ) is the high point of a tension that has dragged on for years with Saudi Crown Prince Mohammed bin Salman (MBS).
The two countries — allies of the US and each owner of more than $1 trillion in sovereign wealth fund assets — have been at odds in crises from Libya to Yemen and Sudan, often backing opposing sides. In broad terms, Riyadh accuses Abu Dhabi of encouraging separatist groups, while the Emirates view with suspicion Saudi support for Islamist groups.
On the economic front, the competition is also explicit: the Saudis want to turn Riyadh into a financial hub capable of competing with Dubai.
Forming Blocs
Despite the tense climate, the Emirates and Saudi Arabia remain aligned on several issues and are expected to maintain cross-border trade — today, tens of billions of dollars in goods cross the border annually. An Emirati official said an extraordinary GCC meeting in Jeddah, held around the time of the OPEC departure announcement — and attended by the UAE’s foreign minister — was a move “in the right direction,” without giving further details.
The UAE’s departure from OPEC tends to consolidate two regional blocs that have already been taking shape. On one side, a Saudi-led axis including Egypt, Pakistan, and Turkey. On the other, a configuration that brings the Emirates, Israel, and India closer together.
In New Delhi, authorities interpreted the move as a political gesture of rebellion, more than a purely economic measure, with potential to weaken the “Arab front.”
“The Emirates do not want to follow an order led by Saudi Arabia or Turkey,” says Dania Thafer, executive director of the Gulf International Forum, a Washington-based think tank. “The country sees itself as a middle power, a counterweight to the others.”
According to sources, the Emirates began seriously mapping out their exit from OPEC around November last year. But the situation soured completely with the mismatch in response to Iran’s missile attacks, in the context of the war with the US and Israel.
Abu Dhabi even considered directly participating in attacks against Iran and defended, at the UN, the use of force to reopen the Strait of Hormuz — a critical route for oil and gas exports. The Saudis did not go along with this: they preferred to press for diplomatic negotiations and discreet back-channel talks to end the conflict.
Israel Factor
The UAE’s rapprochement with Israel in military and intelligence cooperation also weighs on the balance, according to interlocutors. Many Arab countries still see Israel as an expansionist and destabilizing actor in the region, and they blame it for pressuring Washington to go to war with Iran.
“There is a crack in the Gulf,” says Hasan Alhasan, senior policy researcher for the Middle East at the International Institute for Strategic Studies. “The Emirates do not count on full backing from others when it comes to confronting Iran.”
Even so, the Emirates did not enter the war directly — today under a fragile ceasefire — despite damage from Iranian strikes on Abu Dhabi’s energy infrastructure and on the country’s image as a safe port for tourists and investors. Iran fired more missiles and drones at the Emirates than at any other Gulf state, which only escalated the irritation there.
In a recent conversation with European officials, MBZ voiced frustration with the regional neighbors’ collective response to Tehran’s attacks, according to sources familiar with the meeting. He pointed to GCC’s internal divisions and branded the bloc dysfunctional. In the same discussion, he said he intended to strengthen cooperation with the US and Israel.
Right Timing
For Gargash, MBZ’s adviser, the failure of Iran’s containment strategy adopted by GCC countries before the US-Israel military offensive showed that institutions like the GCC “are not up to the task.”
The group, which includes the UAE, Saudi Arabia, Oman, Qatar, Bahrain, and Kuwait, “is living the weakest moment in history, given the kind of attack and the threat it poses to all,” Gargash said, one day before the OPEC departure was announced.
Economically, the decision also aligns with the fact that the UAE has diversified the economy beyond oil and now runs with fiscal surpluses. This gives them room to weather periods of lower prices. Meanwhile, the Saudi government closed 2023 in the red and is expected to run deficits for a few more years — unless Hormuz’s closure keeps pushing oil prices higher.
In Koteich’s view, the economic calculus for leaving OPEC “was complete,” and the only thing missing was the political timing.
That timing came with the war against Iran and with the impact of Hormuz’s closure on the global energy supply, which sent oil back above $100 a barrel.
“It isn’t going to be something that radically changes the market — supply is already tight,” said the UAE’s Energy Minister, Suhail Al Mazrouei, in an interview about leaving OPEC.
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