UAE Quits OPEC as Iran War Deepens Gulf Rivalries and Uncovers Old Faultlines

The United Arab Emirates’ surprise decision to leave the global oil cartel OPEC is a stark indicator of how the ongoing war with Iran is tearing apart Gulf unity. Once a rare example of regional cooperation, OPEC’s cohesion now buckles under the weight of deepening rivalries and historic resentments.

Founded in 1960, OPEC helped Gulf oil producers amass wealth to develop their states, surviving revolutions and wars for decades. But the UAE’s departure—following Qatar’s 2019 exit amid a Gulf blockade—marks a new fracture. Officially, the UAE cited frustration over Saudi Arabia’s refusal to increase its production quota despite the Emirates’ spare capacity. But this is just the surface.

The UAE and Saudi Arabia, once close allies, have drifted sharply apart. Conflicting approaches to conflicts in Yemen and Sudan, divergent stances on Israel, and escalating economic competition have all driven a wedge between them. The UAE normalized ties with Israel in 2020, while Saudi Arabia insists on Palestinian statehood first. Meanwhile, both countries have been hit hard by Iran’s actions in the current war, yet their responses only deepen their rivalry.

Saudi Arabia’s economic ambitions hinge on political stability and high oil prices—conditions threatened by the war and its fallout. The kingdom has responded by strengthening defense ties with nuclear-armed Pakistan, a move that irks the UAE, which favors close relations with India. The UAE’s demand that Pakistan repay a $3.5 billion loan, met by Saudi financial rescue, underscores the shifting alliances.

The timing of the UAE’s OPEC exit—coinciding with a Gulf Cooperation Council meeting in Riyadh aimed at presenting a united front on Iran—was a direct slap at Saudi leadership. It highlights the unraveling of Gulf solidarity at a moment when the region faces its gravest challenges.

Beyond intra-Gulf tensions, the war has revived old territorial disputes. Iran’s occupation of three islands claimed by the UAE since Emirati independence in 1971 remains a flashpoint. These strategic islands bolster Iran’s control over vital Gulf shipping lanes. The dispute traces back to secret deals between Britain and the Shah of Iran, illustrating how colonial legacies still haunt the region.

Other Gulf states feel the war’s sting too. Kuwait endures attacks from Iran-linked militias, dredging up painful memories of past conflicts. Bahrain, Kuwait, and Qatar suffer economic blows due to their reliance on the Strait of Hormuz, a chokepoint Iran threatens. In contrast, Oman and the UAE can bypass the strait, with Oman potentially gaining long-term advantage by controlling access or charging tolls—a prospect neither Saudi Arabia nor the UAE welcomes.

This war, fueled by reckless US and Israeli provocations against Iran, is fracturing the Gulf along old lines and creating new ones. It is eroding the scant regional cooperation that remains, making a volatile and dangerous region even more unstable. For Gulf states and the world, the fallout from this conflict is far from over—and the costs will be steep.