Iran Conflict Brief: Why the UAE Is Leaving OPEC Now

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Apr 29, 2026

Yasser El-Gindi, partner and oil-market strategist with 25+ years advising institutional investors, breaks down the UAE's dramatic exit from OPEC. He explores why the timing minimized disruption. He contrasts stressed physical markets with softer futures, warns about jet fuel and inventory strains, and outlines how a post-Hormuz world could reshape global energy security.

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INSIGHT

UAE Quit OPEC After Longstanding Quota Frustration

The UAE left OPEC largely because it was dissatisfied with its production quota after investing in capacity and chose a low-disruption moment to announce withdrawal.
Yasser El-Gindi says the move had been brewing for years and the UAE timed it during the crisis to minimize market disruption.

INSIGHT

Saudi Likely To Be Pragmatic Not Punitive

Saudi Arabia is likely to remain pragmatic in market management and won't instantly flood the market to punish cheaters given current capacity constraints.
El-Gindi expects continued Saudi-UAE working relationships and adjustments to how OPEC operates post-Hormuz.

INSIGHT

Physical Markets Diverge Sharply From Futures Prices

There's a deep split between stressed physical markets and softer futures prices; physical markets price longer outages while futures are not reflecting current strain.
El-Gindi calls the futures curve a 'fiction' relative to visible physical tightness like jet fuel spikes.

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It has been a tumultuous 24 hours for the global energy landscape. Yesterday, the United Arab Emirates sent shockwaves through the oil industry by announcing its withdrawal from OPEC, marking a historic break with Saudi Arabia in the midst of the ongoing regional crisis. This move comes as the Strait of Hormuz remains almost entirely shut, with the US intensifying its naval blockade and threatening to cut off major Chinese banks from the US financial system to halt the processing of Iranian oil.

Despite a diplomatic impasse, the physical realities of the market are reaching a breaking point. Brent crude is trading over $118 a barrel, near its wartime highs, and gasoline prices in the US have climbed to an average of $4.22 a gallon—its highest level since the beginning of the Russia-Ukraine war. With the world burning through crude inventories and jet fuel costs in Asia more than doubling since the Iran war began, the oil market appears to be losing hope for a swift reopening of the strait, forcing a painful calibration between dwindling supply and record-high prices.

So, what does a "dysfunctional" OPEC mean for the future of market management without one of its most important shock absorbers? How much of the world's energy infrastructure has been permanently damaged by the conflict? And what does the tipping point for global demand destruction actually look like?

Today on the show, host Daniel Sternoff talks with Yasser Elguindi about the latest developments in the Middle East. They discuss the UAE's motivations for leaving the cartel, the growing dichotomy between physical and futures markets, and how a "post-Hormuz" world will fundamentally reshape the global energy industry. Yasser is a partner and co-portfolio manager at the Westbeck Energy Opportunity Fund and a veteran oil market strategist with over 25 years of experience advising institutional investors through every major market shock of the 21st century.

Credits: Hosted by Daniel Sternoff. Produced by Mary Catherine O'Connor, Caroline Pitman, and Kyu Lee. Engineering by Gregory Vilfranc.