Energy analysts have warned that the planned exit of the United Arab Emirates from the Organization of the Petroleum Exporting Countries could weaken the cartel’s influence on global oil prices and negatively impact Nigeria’s revenue outlook.
The UAE’s withdrawal, scheduled to take effect on May 1, 2026, is expected to remove about 1.2 billion barrels of annual crude production from OPEC’s coordinated supply system. The country currently produces an average of 3.36 million barrels per day—roughly 12 per cent of the group’s output—making its departure a significant shift in the global oil landscape.
While some view the move as an opportunity for Nigeria to increase its market share, experts caution that the likely outcome could be price instability and reduced earnings.
Petroleum economist Wumi Iledare said the development reflects deeper structural tensions within OPEC, particularly between countries seeking to maximise production and those committed to supply discipline.
He warned that a weaker OPEC could struggle to stabilise oil prices, exposing Nigeria to lower revenues, especially given its ongoing production challenges.
“For Nigeria, the risk is twofold—downward pressure on prices and limited capacity to benefit due to domestic inefficiencies,” he noted, urging the government to improve production efficiency, reduce costs, and accelerate diversification into gas and other sectors.
Similarly, Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, said the UAE’s exit is more likely to disadvantage Nigeria.
According to him, OPEC’s ability to regulate supply and maintain favourable prices will be weakened, potentially leading to lower crude prices even if Nigeria is allocated a higher production quota.
He warned of a “double tragedy” if Nigeria fails to boost output while prices decline, stressing the need for economic diversification and increased investment in refined products rather than crude exports.
On the global front, Saul Kavonic of MST Financial described the move as a potential turning point for OPEC, raising concerns about the group’s long-term cohesion and effectiveness.
For Nigeria, analysts say the key challenge remains internal—addressing oil theft, pipeline vandalism, and underinvestment—while preparing for a more competitive and less coordinated global oil market.
