Summary: HSBC warns that the United Arab Emirates' decision to leave OPEC and the broader OPEC+ alliance from May 2026 is unlikely to shift global oil balances immediately because of ongoing shipping restrictions through the Strait of Hormuz. The bank cautions, however, that the UAE’s exit could reduce the group's cohesion and make supply management and price support more difficult over time.
The UAE, which is among OPEC's largest producers, has said it will withdraw from both organisations effective May 2026. In a research note published on Tuesday, HSBC assessed how that move may affect oil markets in both the near and longer term.
In the near term, the bank expects minimal change to actual global crude supply. HSBC points to significant disruptions in the Strait of Hormuz - which it says has been effectively closed since late February - as the key constraint limiting additional exports from Gulf producers. That restriction caps any immediate increase in UAE output because shipping routes remain impaired.
HSBC highlights the Abu Dhabi Crude Oil Pipeline, which carries crude to Fujairah and bypasses the Strait of Hormuz, as the UAE's main alternative export route. The bank notes the pipeline has capacity of up to about 1.8 million barrels per day and believes it is likely operating at or near full utilisation today, limiting scope for higher shipments via that corridor.
Looking ahead, HSBC says that once maritime access through the Strait of Hormuz is restored, the UAE will no longer be bound by OPEC+ production quotas and could progressively expand output. The bank estimates that Abu Dhabi National Oil Company could boost production to more than 4.5 million barrels per day, versus an OPEC+ quota of about 3.4 million barrels per day for the May 2026 period.
Any uptick in supply, HSBC cautions, is unlikely to arrive overnight. The bank expects additional barrels from the UAE to be phased in over a 12 to 18 month timeframe, in line with ADNOC's stated approach to raising production gradually and in response to demand and market conditions. Those incremental barrels, HSBC argues, would contribute to rebuilding global oil inventories that have been drawn down recently.
Over the longer term, HSBC sees a different set of risks. The bank says the departure of a core Gulf member could weaken OPEC+ cohesion and credibility, making it harder for the remaining members to enforce coordinated supply discipline. The UAE's expanding production capacity and investment plans - including a $150 billion programme through 2030 cited by HSBC - imply an intent to monetise reserves with fewer output constraints than under OPEC+ participation.
HSBC also flags the potential for increased compliance slippage among the remaining OPEC+ members if the collective commitment to quotas weakens. In such a scenario, the group may find it more difficult to manage prices during periods of softer demand or when non-OPEC supply rises, the bank warned.
Context limitations: The bank's estimates, timelines for output increases, and the operational state of export routes are presented as HSBC's assessments in its research note. The note frames these outcomes around the current shipping constraints and ADNOC's stated production strategy, and it forecasts changes conditional on restoration of normal shipping access through the Strait of Hormuz.