The UAE’s Exit from OPEC: Implications for Korea's Cooperation with Gulf Oil Producers

When an oil producer leaves OPEC, attention naturally turns to prices. Will it pump more oil? Will other producers follow? And will consumers benefit?

For South Korea, another question deserves equal attention: how can greater competition among oil exporters translate into more reliable oil supply and investment opportunities?

In my recent KIEP publication, I examine the UAE’s departure from OPEC and argue that Korea has an opportunity to improve its cooperation with Gulf producers. Realizing that opportunity will require attention to storage agreements, transport routes, and relationships with both Saudi Arabia and the UAE.

Why the UAE left OPEC

The UAE announced its withdrawal from OPEC and OPEC+ on April 28, 2026, effective May 1. The decision ended nearly six decades of membership, but the underlying tensions had developed over years.

The central economic issue was the gap between the UAE’s investment in production capacity and the output permitted under OPEC+ arrangements. ADNOC reported maximum sustainable capacity of 4.85 million barrels per day, compared with an OPEC+ production baseline of 3.52 million. The precise gap depends on how capacity is measured, but the incentive was clear: the UAE wanted greater freedom to use the capacity it had built.

War and disruption in the Strait of Hormuz helped determine the timing. With exports already constrained and markets focused on interrupted shipping, the immediate consequences of the UAE’s exit from OPEC were less pronounced. The conflict therefore can be interpreted as a trigger for a decision rooted in longer-standing economic tensions.

Competition extends beyond production

Following its departure, the UAE increased output and announced changes to how it prices its crude. Saudi Arabia, meanwhile, lowered its official selling-price differentials for Asian buyers and expanded alternative export routes as it sought to recover market share lost during the disruption.

These strategies differ, but both place greater emphasis on securing buyers and delivering oil. Expanding supply from producers outside OPEC+ adds further competitive pressure.

For an importer, this can improve negotiating conditions. Yet attractive prices alone do not guarantee secure supply. Oil must also be available when needed and transported through routes that remain usable during a crisis.

Three priorities for Korea

Saudi Arabia and the UAE supplied 33.6% and 11.4% of Korea’s crude imports in 2025, respectively. Both also possess substantial production flexibility and pipelines that bypass Hormuz, so cooperation with them can help Korea secure additional oil and alternative delivery routes during disruptions.

First, strengthen Korea’s emergency access to oil through joint storage agreements. Producers gain access to storage facilities near Asian customers, while Korea can negotiate priority purchasing rights over the oil stored domestically. The practical details matter: how much oil Korea can purchase, for how long, and under what conditions those rights become available. These arrangements should complement international emergency-response mechanisms.

Second, connect storage, terminals, and transport. Korea can consider cooperation around the UAE’s Fujairah infrastructure and Saudi export routes through Egypt to the Mediterranean. Korean shipping companies already participate in these transport networks. This creates opportunities to link infrastructure investment with shipping capacity. Longer routes carry additional costs, however, so their value should be assessed partly as insurance against disruption.

Third, develop cooperation with both countries. Competition between Saudi Arabia and the UAE creates opportunities for Korea, but also makes relationship management more demanding. Korea can pursue storage, infrastructure, and technology cooperation with both, tailoring individual projects to each country’s strengths and geographic position.

The UAE’s departure creates an opening for Korea to negotiate arrangements that remain useful beyond the next oil-price movement. The policy opportunity for South Korea is to turn competition for sales into dependable access to supply.

This article is based on my publication (written in Korean), “UAE의 OPEC 탈퇴에 따른 걸프 산유국과의 협력 과제,” KIEP 세계경제 포커스, No. 26-63.