Saudi oil prince's iron grip faces ultimate test with UAE's shock OPEC exit

Saudi Energy Minister Prince Abdulaziz bin Salman is confronting a renewed challenge within OPEC+ alongside what is being described as the largest disruption to global oil supplies in recent history.

The Iran war has significantly disrupted crude exports from key Gulf producers, limiting the ability of Saudi Arabia and other members of the oil-producing alliance to deploy spare production capacity typically used during periods of crisis.

Compounding the situation, the sudden departure of the United Arab Emirates (UAE)—OPEC’s fourth-largest producer last year—has removed a major source of spare capacity, second only to Saudi Arabia. The move is seen by delegates within the broader OPEC+ group, which includes Russia and other producers, as a significant test for Prince Abdulaziz, the kingdom’s first royal energy minister, whose leadership style has increasingly shifted from consensus-driven diplomacy toward more unilateral decision-making.

“The UAE has been chafing inside OPEC for years and never got a fair hearing over its quota. So now the chickens have come home to roost,” said Jim Krane, a fellow at Rice University’s Baker Institute.

Known as ABS, Prince Abdulaziz’s influence within OPEC+ is largely anchored in Saudi Arabia’s dominant oil production capacity and its position as the holder of the group’s largest spare capacity. Unlike previous energy ministers, he operates with strong backing from his half-brother, Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler.

He previously led OPEC through a major price conflict with Russia in 2020, after Moscow initially resisted production cuts amid collapsing global demand. At the time, he described the standoff as a matter of survival and control over the oil market.

He has also repeatedly resisted calls from former U.S. President Joe Biden to increase output. In 2022, OPEC granted him expanded authority, including the ability to convene meetings at short notice.

However, the current market environment presents new complications. If the Strait of Hormuz fully reopens and Gulf production normalizes, the UAE’s return to unconstrained output—representing around 12% of OPEC production last year—could introduce a major variable that Saudi Arabia may no longer be able to manage alone.

The Saudi government communications office, the Ministry of Energy, and the UAE’s energy and foreign ministries did not respond to requests for comment.

Reduced room for negotiation

During the 2020 pandemic oil crisis, Prince Abdulaziz insisted on unanimous agreement for record OPEC+ production cuts, leading to extended negotiations that ultimately required external coordination, including U.S. involvement to secure broader compliance.

However, according to two OPEC+ delegates, the emphasis on unity has since become more rigid and centralized.

Saudi officials now typically communicate final agreement terms to smaller member states only a day before meetings, the delegates said. In one recent session, discussions reportedly lasted less than half an hour, beginning with Russia’s representatives followed by a limited group of countries participating in voluntary production cuts.

While some delegates acknowledge that Saudi Arabia continues to bear the largest share of output reductions, they also note growing frustration over reduced consultation and diminished influence of technical advisory input since late 2022.

“We appreciate what His Royal Highness is doing for the oil price,” one delegate said, speaking anonymously.

Despite tensions, some officials within OPEC+ believe the current crisis could ultimately reinforce group cohesion by streamlining decision-making processes.

Longstanding rivalry

Tensions between Saudi Arabia and the UAE have been building for years, reflecting both geopolitical and economic competition within the Gulf region.

A notable escalation occurred when fighting broke out in Yemen between factions supported separately by Riyadh and Abu Dhabi. Oil policy disagreements also intensified in 2021 when the UAE publicly demanded a higher production quota, securing a 300,000 barrels-per-day increase only after open disputes within OPEC.

At the time, UAE Energy Minister Suhail al-Mazrouei said it was “unreasonable to accept further injustice and sacrifice,” while Prince Abdulaziz responded that compromise was essential to maintaining OPEC+ stability.

Since 2019, the UAE has secured one of the largest increases in production targets among OPEC members, while some countries, including Angola and Nigeria, saw reductions. Angola eventually exited the group in 2023 following disagreements over quotas.

Market impact remains limited for now

Despite structural changes within OPEC+, the immediate impact on global oil markets remains limited while access through the Strait of Hormuz remains disrupted.

Iraq and Kuwait have experienced the sharpest declines in export volumes, while the UAE has continued partial shipments via the Gulf of Oman. Saudi Arabia has redirected an estimated 60% to 70% of its exports through pipelines leading to the Red Sea, infrastructure originally developed during the Iran-Iraq war.

At a closed-door OPEC conference last year, the UAE reportedly indicated plans to expand production capacity by up to 20% after 2027, a move widely interpreted as a long-term challenge to Saudi dominance within the group.

-Reporting by Reuters; Editing by Kirsten Donovan/Reuters