The United Arab Emirates on Tuesday announced its decision to exit OPEC and the broader OPEC+ alliance, citing the need to prioritise "national interests" amid rising global energy uncertainty driven by geopolitical tensions, including the US-Israel conflict with Iran.
Energy experts, however, warned that the UAE's exit could trigger instability in the global oil market and create fresh challenges for Nigeria.
For Abu Dhabi, the decision reflects long-standing tensions, particularly with Saudi Arabia, over production limits.
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While OPEC+ capped UAE output at about 3 million barrels per day, the country has capacity exceeding 4 million and plans to reach 5 million by 2027--targets seen as incompatible with existing quotas.
For Nigeria, the development may intensify calls for a higher production quota beyond the current 1.5 million barrels per day. However, concerns persist over its ability to meet such levels.
According to OPEC's March 2026 report, Nigeria's crude production, excluding condensates, rose to 1.38 million barrels per day, up from 1.31 million in February, based on official data.
Oil and gas analyst Ben Owoleke told Daily Trust that the move may encourage other producers, including Kazakhstan, to consider leaving the cartel to escape production limits.
He noted that the UAE has long pushed for higher quotas, with its output capped at about 3.2 million barrels per day despite having the capacity to nearly double production.
Similarly, Muda Yussuf, former Director-General of the Lagos Chamber of Commerce and Industry, said the UAE's exit could weaken OPEC's ability to coordinate supply and influence global oil prices.
On the implications for Nigeria, energy expert Hashim Bokori said the UAE's decision was driven by national survival, as it seeks to increase output beyond OPEC limits.
He warned that unrestricted UAE exports could intensify competition, forcing Nigeria to lower prices to retain buyers. He also questioned whether Nigeria has the capacity to meet higher production quotas if granted.
Yussuf added that increased supply could flood the market, pushing prices down and reducing Nigeria's oil revenue, which is critical for funding government expenditure.
Also, Wumi Iledare said the development signals a shift from coordinated supply management to a more competitive market.
He explained that while geopolitical tensions may drive short-term price volatility, increased output could lead to softer prices over time.
He said Nigeria's key challenge is not quota but production capacity, as the country may struggle to boost output quickly enough to offset potential revenue losses in a less regulated oil market.
Dayo Ayoade, a professor at the University of Lagos, said the exit of the UAE from OPEC could significantly affect oil pricing and supply dynamics, describing the move as a shock to global markets, particularly amid tensions around the Strait of Hormuz.
He noted, however, that such exits are not unprecedented, as some countries have previously left and later returned to OPEC.
Ayoade explained that the UAE, with production capacity approaching 5 million barrels per day, is pursuing a nationalistic energy strategy to maximise output during the global energy transition, rather than adhering to OPEC's collective approach.
He added that OPEC no longer wields the same dominance in global oil markets as it once did.
According to him, Nigeria's priority should be to boost its production capacity. If the country can export up to four million barrels per day, he argued, it would be unreasonable to accept a 1.5 million barrel quota, stressing that national interest should take precedence.
The NNPC Limited has announced that Nigeria's crude oil output, including condensates, rose to 1.71 million barrels per day--the highest level recorded in five years.
In a report released on Tuesday, the company said it achieved notable progress in crude production, gas infrastructure, and refinery restructuring within its first year under a renewed mandate. Its upstream subsidiary, NNPC Exploration and Production Limited, reached a peak production of 365,000 barrels per day in December 2025.
NNPC also highlighted advancements in production sharing contracts, including the execution of a model PSC for oil mining leases PPL 2000 and 2001, expected to unlock investment in deepwater non-associated gas development.
The company further disclosed that it resolved the long-standing dispute over Oil Prospecting Lease 245, paving the way for its conversion into new PSCs covering PMLs 102 and 103, as well as PPLs 2011 and 2012 under the Zabazaba/Etan project.
In the gas sector, NNPC reported key infrastructure milestones. It confirmed completion of the Ajaokuta-Kaduna-Kano (AKK) pipeline River Niger crossing and welding works by July 2025, and the commissioning of the Obiafu-Obrikom-Oben (OB3) gas pipeline linked to the Assa North-Ohaji South (ANOH) project.
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Gas supply agreements also expanded, with deliveries reaching 7.5 billion standard cubic feet per day in 2025. The company executed a Network Exit Agreement involving NGIC and Dangote Fertiliser Limited, alongside a separate supply deal between NGML and Dangote Cement.
Additional developments include optimisation of the Sokoto pipeline to boost gas output and the launch of the NNPC Gas Master Plan in January 2026. New gas supply agreements were also signed with CNG Ibese to deepen domestic gas utilisation.
On refining, NNPC said it has transitioned its refineries to an Incorporated Joint Venture model to enhance commercial viability and self-financing. It also consolidated a 7.25 percent equity stake in the Dangote Refinery, describing the move as strategic for safeguarding national energy interests.
Despite these gains, the report did not address persistent challenges such as crude theft, pipeline vandalism, and foreign exchange constraints, which analysts say continue to affect Nigeria's oil sector performance.
