---
title: "From the Petrodollar to the Petroyuan: Will the UAE's Decision to Withdraw from \"OPEC and OPEC+\" Accelerate the Global Shift? | Ghazi Mahmoud"
url: https://ghazimahmoud.com/en/articles/2026-05-07-ed773d/
lang: en
description: "The announcement by the United Arab Emirates of its exit from OPEC and the OPEC+ alliance marked a surprising step and a striking shift in the course of regional and international energy policies, raising questions about the organization's future and its role in the global energy market."
---

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# From the Petrodollar to the Petroyuan: Will the UAE's Decision to Withdraw from "OPEC and OPEC+" Accelerate the Global Shift?

[Brig. Gen. (Ret.) Dr. Ghazi Mahmoud](https://ghazimahmoud.com/en/about/)

7 May 2026 · 6 min read

[Energy, oil and gas](https://ghazimahmoud.com/en/articles/energy/)[The world economy](https://ghazimahmoud.com/en/articles/world/)

The announcement by the United Arab Emirates of its exit from OPEC and the OPEC+ alliance marked a surprising step and a striking shift in the course of regional and international energy policies, raising questions about the organization's future and its role in the global energy market. The UAE's decision comes at a highly sensitive juncture for both global oil markets and the Gulf region, amid escalating geopolitical tensions linked to the war on Iran. In particular, the security challenges facing the Gulf region coincide with rapid transformations in the oil industry and the expanding use of renewable energy, as producing countries seek to curb rising global prices resulting from the imbalance between supply and demand, especially following the closure of the Strait of Hormuz, while also striking a delicate balance between price stability and boosting revenues amid growing challenges stemming from slowing global demand. OPEC: The beginning of the end? The Emirati move comes after nearly 59 years of cooperation with OPEC, which it joined in 1967 through the Emirate of Abu Dhabi, representing a calculated repositioning aimed at widening its margin of sovereign decision-making regarding the expansion of its investments, sector development, and production policies, and strengthening its independent oil and economic strategy in global energy markets. Despite the UAE's affirmation of its continued commitment to supporting the stability of global markets, its withdrawal is bound to weigh negatively on markets over the long term and lead to lower prices as a result of more flexible production policies it may pursue, forcing OPEC to cut its output to maintain prices, a step that will spark further disagreements among its members. Notably, Abu Dhabi has been working for years to expand its production capacity, an effort that clashed with the quota ceilings adopted by OPEC and the OPEC+ alliance to prevent prices from falling, making withdrawal an option more aligned with its long-term strategy of raising output to 5 million barrels in 2027, whereas its current production is limited to around 3.6 million barrels per day. The exit of Abu Dhabi, one of the leading oil producers in the Arabian Gulf, from OPEC is likely to reflect negatively on the organization's cohesion and weaken its control over markets and its ability to manage them, potentially affecting its internal balances and marking the beginning of its end, particularly given the diverging interests of member states and recurring disputes over quotas and production levels. An Emirati-Saudi divergence: The UAE's decision to leave OPEC also reflects negatively on its relations with the Kingdom of Saudi Arabia, which often leads efforts to regulate the market by cutting or raising production. It brings into the open the differences that have escalated between the two countries, particularly over the Yemeni and Sudanese issues. Moreover, the decision by the United Arab Emirates to withdraw from OPEC places the Kingdom face to face with a major regional partner moving at a more independent pace, which could lead to diverging positions during periods of price volatility, while simultaneously intensifying the undeclared competition between the two countries to claim the status of regional financial and economic hub in the Arabian Gulf. An American interest? Analysts believe that the UAE's decision to exit OPEC serves the interests of the United States, which could benefit from it in various ways, mostly centered on declining cohesion and coordination among producing countries, which had given OPEC greater ability to control the market. It makes it easier for the United States to deal with producing countries bilaterally and enhances its ability to build individual partnerships that serve its interests. The UAE's exit from OPEC also represents a gain for US President Donald Trump, as it could lead to increased oil supply, ensuring stable prices and reducing the effectiveness of production-cut policies. Trump has previously leveled sharp criticism at OPEC, arguing that its policies contribute to driving up oil prices and accusing it of exploiting the rest of the world by controlling its markets. From the petrodollar to the petroyuan? Conversely, some argue that the UAE's exit from OPEC and the OPEC+ alliance poses a fundamental threat to the petrodollar system, which OPEC has played the central role in entrenching and maintaining since its founding in 1960. For so long, Middle Eastern producers have sold their oil in US dollars, which they then recycle into US Treasury bonds, granting Washington near-total control over the global financial system. Today, however, the US dollar's share of global foreign exchange reserves has fallen to around 57%, its lowest level in 25 years, after peaking at 75% in 2001. If this decline continues, the architecture that gave the United States control over the global energy market and its financial transactions will collapse before its eyes. Notably, the Emirati decision came just days after US Treasury Secretary Scott Bessent's announcement before the Senate of his support for establishing an emergency US dollar swap line with the government of Abu Dhabi, something observers consider no coincidence, given that it comes at a time when US influence in the Middle East faces unprecedented challenges and raises questions about whether it aligns with American interests. Economists at Deutsche Bank warn that the withdrawal of the United Arab Emirates from OPEC accelerates this collapse and increases the likelihood that some oil transactions will be priced in the Chinese yuan should the dollar weaken. In particular, the Shanghai Petroleum and Natural Gas Exchange previously announced, on March 28, 2023, the pricing in Chinese yuan of a liquefied natural gas cargo imported from the UAE. At a time when Iran is selling a growing share of its oil to China in yuan, the conflict with it, according to the same economists at Deutsche Bank, is accelerating the erosion of the petrodollar system's dominance in the global energy market, gradually paving the way for the rise of alternative pricing models, foremost among them in favor of the petroyuan. Conclusion: The decision by the United Arab Emirates to exit OPEC and OPEC+ is not merely a technical measure in production management, but a profound strategic shift in the governance structure of the global energy market. It reflects a transition by producing countries, led by the UAE, toward more independent and flexible policies in managing their resources, in line with their national interests and growing production capacities. The decision also reveals a reshaping of regional balances of power, particularly the relationship between the United Arab Emirates and the Kingdom of Saudi Arabia. While the Emirati decision gives the United States wider room for maneuver by weakening OPEC, curbing its ability to regulate the market, and intensifying competition among producers, on the broader international level it may accelerate the decline of the petrodollar's dominance and gradually open the door to alternatives, notably the Chinese yuan, amid deeper transformations in the global economic order.

Translated from Arabic with AI. [Read it in Arabic](https://ghazimahmoud.com/articles/2026-05-07-ed773d/)

## Published in

- [Anbaa Online](https://anbaaonline.com/news/326481)

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