Goldman Sachs says the UAE’s OPEC exit poses greater medium-term than short-term oil supply upside risk, with UAE crude production potential estimated at just over 4.5 million bpd, constrained near-term by Hormuz closure.
Goldman Sachs says the UAE’s OPEC exit poses greater medium-term than short-term oil supply upside risk, with UAE crude production potential estimated at just over 4.5 million bpd, constrained near-term by Hormuz closure. Summary: Goldman Sachs said the UAE’s OPEC exit, effective May 1, poses a greater upside risk to oil supply over the medium term than the short term, as the Strait of Hormuz closure currently caps UAE output regardless of quota status The bank said the exit follows years of tension over the UAE’s production quota and comes in the context of the US-Israel war on Iran, in which the UAE has faced significant Iranian attacks despite Iran holding OPEC membership and quota exemption Goldman’s base case assumes UAE crude production recovers to 3.8 million bpd by October 2026, above the pre-war level of 3.6 million bpd, but the exit implies upside risk to that forecast The bank estimates the UAE’s potential crude production capacity at just over 4.5 million bpd as of February 2026, with ADNOC formally targeting 5 million bpd by 2027 Goldman’s base case models cumulative Gulf crude production losses of 1.83 billion barrels by December 2026, with global oil inventories needing replenishment once the Strait reopens Oil prices surged more than 6% on Wednesday as deadlocked US-Iran negotiations heightened concern over prolonged supply disruption The UAE produced 3.4 million bpd before the war but output slumped by nearly half to around 1.9 million bpd in March following the Hormuz closure, according to data cited by The National Goldman Sachs has assessed the UAE’s departure from OPEC and OPEC+ as a medium-term rather than short-term supply risk, with the effective closure of the Strait of Hormuz insulating oil markets from any immediate increase in Abu Dhabi’s output even as the emirate sheds the quota constraints that had held its production well below capacity for years.
The UAE confirmed on Tuesday that it would exit the producer group with effect from…