Brent: UAE exit reshapes supply outlook – ING

ING analysts Warren Patterson and Ewa Manthey say the United Arab Emirates' (UAE) departure from OPEC (Organization of Petroleum Exporting Countries) from 1 May is a significant blow to the group but has limited short-term impact on the Oil market due to existing Persian Gulf disruptions. They highlight higher UAE capacity and post-Iran war supply potential, and revise Brent forecasts higher for 2026.

UAE departure shifts Brent dynamics

"The big development in oil markets yesterday was news that the UAE is set to leave OPEC from 1 May. This is a significant move and will be a big blow to OPEC. It’s the highest-profile exit from OPEC in recent years."

"The UAE’s exit will increase output, with current production capacity of around 4.85m b/d and plans to reach 5m b/d by 2027. However, before this can be tapped, there must be a resolution in the Persian Gulf that allows for uninhibited energy flows through the Strait of Hormuz once again. Therefore, in the short term, this development has little impact on the market."

"But in the medium to longer term, it means more supply for the market. This suggests that the Brent forward curve should move into deeper backwardation."

"However, in the near term, the biggest driver for oil prices remains developments in the Persian Gulf and the timing of a resumption in oil flows through the Strait of Hormuz."

"With no signs of an imminent restart in oil flows we have revised higher our oil forecasts for the remainder of the year. We now expect ICE Brent to average $104/bbl in 2Q26 and $92/bbl in 4Q26."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)