Oil prices have fallen due to the UAE's withdrawal from OPEC and tensions surrounding Iran
On Wednesday, global oil prices fell after several days of gains. Investors are assessing the implications of the United Arab Emirates’ unexpected decision to leave OPEC, against the backdrop of ongoing risks of supply disruptions due to the war with Iran.
This was reported by Reuters.
Brent crude futures for June delivery fell by 1 cent to $111.25 per barrel. The most actively traded July contract dropped by 28 cents to $104.12.
LSEG senior analyst An Pham notes that the slight decline may be linked to the UAE’s exit from the oil cartel. This potentially paves the way for increased production, though the effect will not be immediate.
“So while prices have fallen slightly, this looks more like a correction following the previous rise, and Brent crude is still holding at a high level—around $110 per barrel. However, this effect is not immediate, as the additional oil volumes are unlikely to be delivered in the near future due to the ongoing blockade of the Strait of Hormuz,” he noted.
Despite the announced ceasefire between the U.S. and Israel on one side and Iran on the other, the conflict effectively remains at an impasse. Both sides insist on their own terms for ending hostilities.
Meanwhile, Iran has closed the Strait of Hormuz—a key route through which about 20% of global oil and liquefied natural gas supplies pass. In response, the U.S. is restricting Iranian ships’ access to ports.
Haitong Futures analyst Yang An notes that the blockade was the key factor behind the recent spike in prices:
“The recent rise in oil prices was caused by the blockade of the strait. If Trump is prepared to continue the blockade, supply disruptions will worsen further and continue to push oil prices higher,” he said.
Against this backdrop, the U.S. continues to pressure Iran over its nuclear program, while Tehran demands an easing of sanctions and certain guarantees regarding control over the Strait of Hormuz.
As a reminder, the United Arab Emirates officially announced its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC) effective May 1, 2026. The country took this step after failing to receive support from other OPEC members—the Gulf states—during the war with Iran. The Emirates plan to independently determine oil production volumes, guided by their own interests and the development of new technological solutions in the sector.
As a reminder, OPEC oil exports plummeted to a record low in March.
Earlier, OPEC+ agreed to a minimally symbolic increase in oil production amid the war in Iran, starting in May 2026.
