The UAE's decision to withdraw from OPEC, effective 1 May 2026, marks a major turning point in the global energy structure, with the following notable details and impacts.
The UAE's withdrawal affects oil prices in two distinct phases.
Short term – volatility: Initially, oil prices may rise due to political uncertainty, especially tensions with Saudi Arabia and the situation in the Strait of Hormuz, which could disrupt transportation.
Long term – downward trend: Without having to adhere to OPEC production quotas, the UAE can increase output based on its full capacity. Currently, the UAE has a reserve production capacity of up to 5 million barrels per day. Freely increasing supply to the global market will likely pressure crude oil prices to decline in the future.
For Thailand, a net oil importer, the effects include both positives and negatives:
Positive – lower costs: If global oil prices fall long term due to the UAE's increased production, this will reduce living expenses, transportation costs, and Thailand's trade deficit. Additionally, Thailand may negotiate to purchase oil directly from the UAE without group conditions.
Negative – volatility: During market adjustment, oil price fluctuations could burden Thailand's fuel oil fund in price stabilization efforts and impact energy sector stocks on the Thai stock exchange.
Most of the UAE's crude oil exports go primarily to Asia. Major customers based on 2024-2025 data include:
Japan: The largest buyer, heavily dependent on Middle Eastern energy.
India: Has close strategic energy cooperation with the UAE.
China: Although sourcing from multiple suppliers, the UAE remains a key trading partner.
South Korea and Thailand: Thailand ranks among the top countries with a trade surplus with the UAE in energy imports.