The UAE can bypass the strait via an existing pipeline to the port of Fujairah but that route allows for only around 1.5 to 1.8 million barrels per day, well below its full production potential. This means that regardless of OPEC status, the UAE is severely limited by how much additional oil it can deliver to international markets.
Oil prices in the coming months will remain driven mainly by war risks, shipping delays, higher insurance costs and supply disruptions, rather than the UAE’s OPEC exit. This has been the case so far, with initial declines in oil prices due to the UAE’s announcement quickly offset by risks associated with the war amid stalled US-Iran negotiations.
