Energy experts are raising new concerns about the United Arab Emirates’ planned departure from the Organisation of the Petroleum Exporting Countries. They caution that the move could reduce the cartel’s power over world oil prices and ultimately harm Nigeria’s revenue prospects.
One of the biggest changes to the oil alliance in decades, the UAE’s withdrawal, which takes effect on May 1, 2026, is anticipated to remove roughly 1.2 billion barrels of crude production annually from OPEC’s coordinated supply framework.
Although some have framed the development as a chance for Nigeria to gain more market share, analysts say the reality may be much less optimistic because the exit could lead to price instability and reveal structural flaws in Nigeria’s oil industry.
The UAE produced an average of 3.36 million barrels per day in 2025, or about 12% of OPEC’s total output, according to data our correspondent was able to obtain. One of the cartel’s most disciplined producers is essentially eliminated from the quota system by its departure.
Experts cautioned in separate interviews with our correspondent on Wednesday that, despite any possible increase in production quota, the UAE’s departure from OPEC could weaken the cartel’s price control, lead to lower crude prices, and ultimately make Nigeria worse off.
According to energy economist and Professor Emeritus of Petroleum Economics Wumi Iledare, the action indicates a more competitive world oil market and deeper rifts within the alliance.
“The current speculation around a possible UAE exit from OPEC, whether confirmed or not, points to a deeper structural issue: growing tension between expanded production capacity and quota constraints within OPEC+,” Iledare wrote in a note titled “OPEC Cohesion Under Strain: A Note for Nigeria.”
From the standpoint of petroleum economics, nations like the UAE that have made significant capacity investments have a strong incentive to give volume monetization precedence over collective price management. OPEC’s capacity to impose discipline may gradually deteriorate if this trend continues—not suddenly, but rather as non-compliance increases.
Nigeria faces two risks in the changing market, he cautioned. There are two risks for Nigeria. First, a less coordinated market could put pressure on oil prices to decline. Second, and more importantly, even when prices are favourable, our domestic underperformance—production shortfalls, high costs, and leakages—limits our ability to profit,” he continued.
He claims that the nation needs to get ready for a time when OPEC’s ability to protect prices will be less dependable. The policy lesson is simple: Nigeria needs to get ready for an OPEC price umbrella that is less dependable. This entails increasing gas-led diversification, lowering unit costs, adopting more cautious fiscal assumptions, and enhancing production security and efficiency.
“The global oil market is becoming less forgiving and more competitive, regardless of whether the UAE leaves OPEC. Iledare stated that Nigeria should react with discipline rather than reliance.
Speaking as well, Muda Yusuf, the CEO of the Centre for the Promotion of Private Enterprise, stated that Nigeria is more likely to suffer than gain from the UAE’s departure. “I believe Nigeria will probably suffer as a result of the UAE’s withdrawal from OPEC. That’s how I see it,” Yusuf remarked.
Because OPEC is a cartel that affects supply and price, its goal is to guarantee that we have a good price so that we can obtain good revenue. Their ability to exercise that influence has decreased now that a significant member has departed. This implies that the UAE can now sell as much crude as it wants to the market, which could result in a drop in price and lessen OPEC’s ability to control prices.
Even if Nigeria is given a larger production quota, he continued, the advantages might be negated by declining prices. Because OPEC’s role is to stabilise prices, we can have more quotas, but the price might be lower. OPEC may cut supply if prices decline. However, the organisation is now weaker. That’s my viewpoint on the matter. The UAE’s departure is probably going to be more detrimental than beneficial. Oil prices might decline as a result, he said.
Yusuf cautioned that if Nigeria doesn’t increase output, a worst-case scenario could occur. “It is a double tragedy for the country if the price is not strong enough because OPEC is now weaker and output is still not there,” he said.
He called on the government to prioritise increasing output and lowering its dependency on crude exports. “The government of Nigeria can enhance our output so that, even if the price is weak and our output is adequate, we would still have enough.
In addition, we ought to rely less on crude oil. We ought to export more sophisticated goods and diversify our economy. Compared to exporting raw crude, that would yield greater profits,” he continued.
On the international scene, Saul Kavonic, Head of Energy Research at MST Financial, cautioned that the UAE’s choice might indicate a wider collapse within OPEC+.
OPEC as we know it may be coming to an end as a result. The organisation is effectively losing 15% of its capacity and one of its most dependable and disciplined producers as a result of the UAE’s departure. He stated, “That raises serious concerns about the group’s ability to maintain cohesion and enforce production targets going forward.”
The UAE, which became a member of OPEC in 1967, claimed that its choice came after a thorough analysis of its production plan and prospects for energy in the future. “This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production,” the nation said in a statement released by its Ministry of Energy and Infrastructure.
“It reaffirms its dedication to a responsible, dependable, and forward-thinking role in international energy markets.”
The ministry also stated that the need for more flexibility in responding to market conditions and national interest were the driving forces behind the move. The departure coincides with escalating geopolitical tensions in the Middle East, especially in the vicinity of the Strait of Hormuz, a crucial international oil transit route, where disruptions have increased worries about supply volatility.
The UAE insisted that it would continue to responsibly supply oil while progressively raising production in response to market demand in spite of these tensions.
However, Nigeria’s capacity to react effectively continues to be a greater concern. Due to underinvestment, pipeline vandalism, and oil theft, the nation has continuously struggled to meet its OPEC quota. Industry data also reveals that OPEC+’s share of the world’s oil supply has already decreased, falling from 48% in February to roughly 44% in March, highlighting waning market dominance.
Since its founding in 1960, OPEC has been crucial in keeping oil prices stable by coordinating production reductions. However, the alliance has been put to the test more and more by internal conflicts, changing national priorities, and the global energy transition.
These pressures are now increased by the UAE’s withdrawal, posing a crucial question for Nigeria: can it quickly adjust to survive in a less coordinated and more volatile oil market?
For the time being, experts predict that the solution will rely more on Nigeria’s capacity to address its long-standing production issues and lessen its reliance on crude oil earnings than on worldwide developments.
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