FG officials back OPEC amid UAE exit concerns

Amid fresh concerns by energy experts that the planned exit of the United Arab Emirates from the Organisation of the Petroleum Exporting Countries may weaken the cartel’s influence on global oil prices and ultimately hurt Nigeria’s revenue outlook, officials of the Federal Government have reaffirmed their commitment and that of the government to OPEC and the broader OPEC+ cooperation framework.

The government officials gave their commitment on Friday in Abuja. Officials within the Federal Ministry of Petroleum Resources who spoke with our correspondent said Nigeria remains aligned with the principles of the Declaration of Cooperation, binding OPEC and its allies, describing the arrangement as critical to stabilising global oil markets.

According to the officials, who spoke in confidence due to ongoing discussions on the matter, the government sees OPEC and OPEC+ as essential platforms for managing supply, reducing volatility, and ensuring a more predictable pricing environment for both producers and consumers.

“The country remains firmly committed to the principles and objectives of the Declaration of Cooperation between the Organisation of the Petroleum Exporting Countries and its allies under OPEC+. This position highlights Nigeria’s continued alignment with collective efforts aimed at ensuring stability in the global oil market.

“Nigeria recognises the critical role of OPEC and OPEC+ in managing oil supply, reducing market volatility, and fostering a more predictable pricing environment. These coordinated efforts are vital to sustaining global economic stability and supporting long-term energy development,” one of the sources said.

Another official further stressed that Nigeria would continue to comply with agreed production frameworks while maintaining active engagement with member countries to strengthen cooperation and market balance. The official, however, noted that national interest remains central to its decisions.

“Nigeria will maintain adherence to agreed production frameworks while constructively engaging with fellow member countries. At the same time, national interest remains a key consideration to ensure that domestic economic priorities are not compromised.

“This position reflects a balanced approach, demonstrating strong support for multilateral energy cooperation while safeguarding its economic interests within the evolving global energy landscape,” the source added.

The reassurance comes as the United Arab Emirates exits OPEC effective May 1, 2026, a move expected to take about 1.2 billion barrels of annual crude production outside the cartel’s coordinated supply system.

Data obtained by our correspondent showed that the UAE produced an average of 3.36 million barrels per day in 2025, representing about 12 per cent of OPEC’s total output, making it one of the group’s most influential and disciplined producers.

While some analysts have suggested that Nigeria could benefit from a higher production quota following the exit, energy experts warn that the broader implications may be negative, particularly if the move weakens OPEC’s ability to influence prices.

Energy economist Wumi Iledare said the development signals deeper cracks within the alliance. “The current speculation around a possible UAE exit from OPEC points to a deeper structural issue: growing tension between expanded production capacity and quota constraints within OPEC+,” he said.

“Countries that have invested heavily in capacity, like the UAE, face a clear incentive to prioritise volume monetisation over collective price management. If this trend strengthens, OPEC’s ability to enforce discipline may gradually weaken, not abruptly, but through rising non-compliance.”

He warned that Nigeria faces a dual risk in the evolving market. “For Nigeria, the risk is twofold. First, potential downward pressure on oil prices in a less coordinated market. Second, and more critical, our domestic underperformance, production shortfalls, high costs, and leakages limit our ability to benefit even when prices are favourable.”

According to him, Nigeria must prepare for a future where OPEC’s price-shielding role becomes less reliable. “The policy takeaway is straightforward: Nigeria must prepare for a less reliable OPEC price umbrella. This means improving production efficiency and security, reducing unit costs, adopting more conservative fiscal assumptions, and accelerating gas-led diversification,” he added.

Also speaking, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the UAE’s exit could weaken OPEC’s influence and ultimately hurt Nigeria’s earnings. “I think the exit of the UAE from OPEC is likely to be a disadvantage for Nigeria. That’s the way I am looking at it,” Yusuf said.

“The objective of OPEC is to ensure that we have a good price so that we can get good revenue. Now that a major member has left, their capacity to wield that influence has diminished. That means the UAE is now free to sell as much crude as it wants, which may lead to a reduction in price.”

He added that increased production quotas may not translate into higher revenue. “We can have more quota, but the price may be lower. If prices are going down, OPEC can reduce supply. But now the organisation is weaker. So, the exit is likely to be more of a disadvantage than an advantage.”

Yusuf warned of a worst-case scenario for Nigeria. “If the price is not strong enough because OPEC is weaker and output is still not there, that is a double tragedy for the country.”

He urged the government to focus on domestic reforms. “For Nigeria, what the government can do is to improve output so that even if prices are weak, we still have enough volume. Beyond that, we should depend less on crude oil and export more refined products,” he added.

The UAE, which joined OPEC in 1967, said its decision followed a strategic review of its long-term energy outlook and investment priorities.

Founded in 1960, OPEC has historically stabilised oil prices through coordinated output cuts. However, internal disagreements, shifting national priorities, and the global energy transition have continued to test the alliance.

Against this backdrop, Nigeria’s renewed commitment underscores its reliance on multilateral cooperation to support oil prices, even as experts warn that the country must urgently address domestic inefficiencies to withstand a more volatile and competitive global oil market.