The author of this article is Dr. Cyril Widdershoven
For decades, OPEC has portrayed itself as a market stabilizer, using production quotas to steer global oil prices. But as we approach the second half of 2025, the group faces a mounting internal crisis—one not just driven by market volatility or geopolitical shocks, but by a deepening rift between its two most powerful members: Saudi Arabia and the United Arab Emirates.
The façade of unity within OPEC, and by extension OPEC+, is cracking. What’s emerging instead is a tale of diverging ambitions, opaque production strategies, and geopolitical one-upmanship that threatens to unravel the group’s relevance altogether.
OPEC+: From Strategic Alliance to Tactical Liability
The once-celebrated OPEC+ alliance, forged in the aftermath of the 2014 price collapse and deepened during the COVID-era demand shock, now looks increasingly brittle. The alignment between traditional OPEC members and non-OPEC producers like Russia was always a marriage of convenience. But the ongoing geopolitical fallout from the Ukraine war, compounded by Western sanctions and the specter of U.S. tariffs on Russian energy exports, has weakened Moscow’s leverage within the group.
Russia may have once tolerated low oil prices to undermine U.S.-EU-UK sanctions, but the calculus has changed. Washington’s threat of 500% tariffs on Russian hydrocarbons, combined with the EU’s looming gas phase-out by 2027, represents a strategic threat to the Kremlin’s petro-financial lifeline. As Russia fades, OPEC+ becomes less of an asset and more of a burden—especially for Saudi Arabia.
Market Confusion Reflects Policy Disarray
The May 2025 production hike—an underwhelming 180,000 barrels per day—revealed more than just technical bottlenecks; it exposed OPEC’s growing inability to meet its own targets. Saudi Arabia, expected to raise output by 230,000 bpd, fell short by nearly half. Iraq is producing below quota due to previous overproduction, while Iran and Venezuela remain constrained by renewed sanctions. Even the United Arab Emirates, with vast untapped capacity, is being held back by an outdated quota system it increasingly resents.
This mismatch between stated strategy and actual output is shaking market confidence. Oil prices remain subdued not because demand is falling—indeed, demand from India and Africa is growing—but because traders no longer believe OPEC can coordinate effectively.
Abu Dhabi vs Riyadh: A Brewing Civil War Within OPEC
Beneath the production numbers lies a deeper political story. The friction between Crown Prince Mohammed bin Salman and UAE President Mohammed bin Zayed is no longer a whisper—it’s a systemic risk to the organization.
Abu Dhabi is aggressively expanding its oil and gas capabilities through ADNOC, having invested over $62 billion in production capacity that now risks becoming stranded. It wants a new quota system that reflects its investments and ambitions. Riyadh, for its part, is focused inward—channeling Aramco revenues into Vision 2030 megaprojects, which require stable (read: high) prices.
While Saudi Arabia needs OPEC to maintain geopolitical stature, the UAE is hedging its bets, investing globally through sovereign wealth vehicles like Mubadala, XRG, ADQ, and IHC. In effect, the UAE is quietly insulating itself from OPEC’s limitations.
This divergence in strategy—Saudi Arabia’s defensive consolidation versus the UAE’s outward expansion—reflects not just differing economic models, but fundamentally incompatible geopolitical visions.
The Illusion of Unity
Officially, the Saudi–Emirati bromance continues. Both sides deny any serious disagreement, and public statements project business as usual. But behind closed doors, the UAE has already flirted with the idea of leaving OPEC, as it did in 2021. The May 2025 agreement to raise production by 411,000 bpd masks deeper tensions. Abu Dhabi supported the move but remains adamantly opposed to any future caps that would limit its monetization window.
The UAE sees time running out. While talk of “peak oil demand” remains speculative, the consensus is that the golden window for fossil fuel exports could close by the 2040s. Abu Dhabi wants to sell now, not later. And it is not waiting for Riyadh’s permission.
The Bigger Picture: OPEC at an Inflection Point
OPEC’s old logic—that cohesion among a few producers can control the fate of the global oil market—is rapidly losing ground. U.S. shale continues to deliver record output. New producers in Africa, Latin America, and Southeast Asia are further diluting OPEC’s influence. Meanwhile, the supposed threats to fossil fuels—EVs, green hydrogen, sustainable aviation fuels—remain niche. Ironically, it is not the energy transition that may break OPEC, but the uneven distribution of hydrocarbon wealth and divergent economic visions among its members.
Saudi Arabia needs OPEC to project geopolitical parity with the U.S. and Russia. The UAE increasingly sees OPEC as a straightjacket. With ADNOC investing in global assets and pushing beyond OPEC’s orbit, the risk of a fracture is not hypothetical—it’s imminent.
Conclusion: Time for a Rethink
If OPEC wants to remain relevant, it must confront its internal contradictions. That may mean revising the quota system, formalizing the end of OPEC+, or even accepting a looser federation model that reflects today’s multipolar energy world. Pretending all is well, while rivals maneuver in the shadows, will only accelerate the group’s decline.
The question isn’t whether OPEC can survive. It’s whether it can evolve before it’s too late.
