On April 28, the United Arab Emirates (UAE) made a landmark announcement that it would withdraw from the Organization of the Petroleum Exporting Countries (OPEC), a move that lays bare how ongoing Middle East conflict has not only deepened hostilities between Iran and its Gulf neighbors, but also fractured unity within the Gulf Cooperation Council itself.
Founded in 1960, OPEC stands out as one of the few enduringly successful multilateral bodies in the Middle East. For decades, its coordinated pricing and production policies enabled Gulf oil-producing states to accumulate the capital needed to renationalize their energy resources and fund the rapid, transformative development that turned small desert nations into global economic players. The bloc has weathered nearly every regional upheaval, revolution and war in its 65-year history, even after Qatar departed in 2019 amid a regional blockade led by its Gulf neighbors.
For years, tension has simmered between the UAE and Saudi Arabia, OPEC’s largest producer and de facto leader, which holds outsized influence over the bloc’s policy decisions. The UAE has long pushed to raise its own production quota, leveraging its untapped spare oil capacity, but repeated attempts have failed to yield changes that align with its economic goals. Yet industry friction alone does not explain the UAE’s decision to exit the organization entirely.
Though the two Gulf powers maintained close alignment through the mid-2010s, the UAE and Saudi Arabia have drifted steadily apart in recent years, driven by sharp divergences on key regional priorities. Their strategies for ongoing conflicts in Yemen and Sudan differ dramatically, as do their approaches to normalization with Israel: the UAE established full formal relations with Israel in 2020, while Saudi Arabia has pledged it will only normalize ties once an independent Palestinian state is established. Beyond geopolitics, the two nations have emerged as fierce economic competitors, and the ongoing regional war connected to Iran has only accelerated their rivalry.
After Iran responded to U.S.-Israeli attacks in February with strikes across Gulf states and a blockade of the strategic Strait of Hormuz, the conflict has laid bare the flaws in existing regional strategies. For Saudi Arabia, the war has exposed the limits of its gradual outreach to Iran and its reliance on the U.S., which is firmly aligned with Israel. In response, Riyadh has deepened defense cooperation with nuclear-armed Pakistan, a shift that has caused significant friction with the UAE, which maintains close strategic ties with Pakistan’s regional rival India. The UAE has publicly pushed Pakistan to issue a stronger condemnation of Iran during the current conflict, a demand Islamabad cannot meet due to its role as a neutral mediator in regional peace talks. Frustrated by Pakistan’s position, the UAE recently demanded Islamabad repay a $3.5 billion loan, only for Saudi Arabia to immediately step in with emergency financial support for Pakistan.
Notably, the UAE’s OPEC withdrawal announcement was timed to coincide with a Gulf Cooperation Council summit in Riyadh, where leaders gathered to try to find common ground on the ongoing Iran conflict. The timing was widely interpreted as a deliberate public snub to Saudi leadership.
The regional war has reignited a host of long-simmering disputes across the Gulf, including the decades-long sovereignty conflict between the UAE and Iran over three strategic islands: Abu Musa, Greater Tunb, and Lesser Tunb. Iran seized control of the islands in 1971, the same year the UAE gained independence from Britain, and the islands give Iran unrivaled strategic control over Gulf shipping lanes. The UAE has never relinquished its claim to the territory, while Iran maintains the islands have always been part of its sovereign territory. Historians believe the handover of the islands was part of a secret deal between Britain and the Shah of Iran in the early 1970s, in which the Shah agreed to abandon Iran’s long-held claim to Bahrain in exchange for control of the three islands. Access to historical records of these negotiations remains restricted, with multiple freedom of information requests for 1960s-era UK Foreign Office documents denied on national security grounds.
Beyond the UAE-Saudi and UAE-Iran rifts, the conflict has hit other Gulf states hard. Kuwait, a small northern Gulf state, has faced repeated attacks from Iran-aligned Shia militias based in Iraq, a wave of violence that has revived traumatic memories of Iran-linked political unrest in the 1980s and Saddam Hussein’s 1990 invasion that left much of the country, including coastal Failaka Island, damaged and abandoned.
Economically, the war has hit Gulf states unevenly. Nations that lack alternative shipping routes to bypass the blockaded Strait of Hormuz – including Bahrain, Kuwait, and Qatar – have suffered the worst economic damage. Bahrain, which already runs persistent budget deficits, relies on aid from wealthier Gulf neighbors to keep its economy afloat. By contrast, the UAE, Saudi Arabia, and Oman all have geographic access to alternative shipping routes that allow them to bypass Hormuz entirely. In fact, Oman, which controls one bank of the strait, could emerge as a long-term beneficiary of the disruption: it could earn revenue by charging tolls for alternative shipping routes under a new agreement with Iran, or see its Arabian Sea ports grow in global significance, potentially reviving its historical status as a major regional trading power. That outcome, however, is unwelcome to both the UAE and Saudi Arabia, which prefer to maintain their dominance of Gulf energy shipping.
In sum, the U.S.-Israeli strike on Iran that triggered the current crisis has reactivated long-buried fault lines across the Gulf and created new divisions between regional states. It has also undermined the few remaining channels for multilateral regional cooperation, turning an already fragmented and volatile region even more unstable. This analysis is by Toby Matthiesen, Senior Lecturer in Global Religious Studies at the University of Bristol, republished with permission from The Conversation under a Creative Commons license.