General News
UAE’s Exit from OPEC: Eroding Pricing Power, Saudi Arabia’s Response, and the Implications for Nigeria
By Uwadiae Osadiaye
In a move that has sent ripples through global energy markets, the United Arab Emirates (UAE) announced on April 28, 2026, that it will formally withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the broader OPEC+ alliance effective May 1.
The UAE, one of OPEC’s largest and most capable producers with output around 3.2–3.6 million barrels per day (bpd) and significant spare capacity, cited national interests and the need for production flexibility amid the ongoing energy crisis linked to Iran-related disruptions.
This departure marks a historic fracture in the nearly 60-year-old cartel and follows precedents like Angola’s 2024 exit over quota disputes. For Nigeria, Africa’s largest oil producer and a longtime OPEC member, the implications centre on weakened cartel cohesion, diminished pricing power, and direct pressure on revenues.
Impact on Oil Prices and OPEC Pricing Power
Free from quotas, the UAE is expected to ramp up production toward 5 million bpd. While current supply disruptions may limit the immediate effect, the added volume will exert downward pressure on prices and increase volatility in the medium to long term. Analysts point to potential declines of $5–7 per barrel once markets normalize.
More critically, the exit undermines OPEC’s core pricing power. The UAE brought meaningful spare capacity; its departure leaves Saudi Arabia carrying a heavier burden for any future production cuts needed to stabilize prices. This makes defending price levels more costly and less effective for the Kingdom.
Saudi Arabia’s Response: A Strategic Setback and Managed Rift
Saudi Arabia, OPEC’s de facto leader, regards the UAE exit as a significant blow to its influence. Riyadh has kept public reactions measured, emphasising the resilience of deep trade, investment, and logistical ties between the two economies. Analysts note that a full economic rupture would harm both sides and is unlikely amid shared regional threats.
Behind the scenes, however, the move exposes and widens longstanding rifts over oil quotas, Yemen, Sudan, and regional influence. It forces Saudi Arabia to shoulder more of the stabilisation burden alone, weakening its ability to enforce discipline across the group. The exit is seen as the UAE asserting autonomy and rejecting Saudi-led oil governance. A recent Gulf summit was described positively by UAE officials, indicating efforts to contain fallout.
This response highlights Saudi Arabia’s recalibration: maintaining core OPEC leadership while adapting to a less reliable alliance structure. It may push Riyadh toward more unilateral production decisions or tighter coordination with remaining compliant members.
Domino Risks and Further Erosion of Influence
Venezuela, with vast reserves and recovering output, emerges as a potential next candidate for greater independence or even exit, alongside other quota-frustrated producers. A cascade of departures could render OPEC largely symbolic, leaving global oil prices driven primarily by market forces rather than coordinated cuts. This would likely result in a structurally lower price floor and higher volatility.
Direct Effects on Nigeria
Nigeria remains heavily dependent on oil for export earnings and government revenue. With production often falling short of its ~1.5 million bpd OPEC quota (recent figures around 1.38 million bpd amid theft, vandalism, and infrastructure issues), the country has limited ability to offset price weakness through higher volumes.
Softer prices or sustained volatility would widen fiscal deficits, pressure the naira, and complicate budgets benchmarked around $65–70 per barrel. Angola’s experience showed that quota freedom alone does not guarantee production gains when structural problems persist- Nigeria risks similar constraints. A weaker OPEC, with reduced Saudi leverage to enforce discipline, further diminishes the “price floor” protection African producers have relied upon.
In this environment, Nigeria’s longstanding challenges – upstream security, investment attraction, and economic diversification – become even more urgent. While the country has reaffirmed commitment to OPEC, the cartel’s diminishing pricing power (exacerbated by the Saudi-UAE rift) means future revenue stability cannot be taken for granted.
Outlook: Navigating a More Fragmented Oil Order
The UAE’s exit, Saudi Arabia’s measured but strained response, and the resulting erosion of OPEC cohesion signal a structural decline in the cartel’s pricing influence and a more market- driven oil era. For Nigeria, this heightens fiscal and currency risks tied to its oil dependence while underscoring the limits of relying on collective producer power.
In the short term, elevated prices from geopolitical disruptions may provide a temporary buffer. Over the medium to long term, however, increased supply from the UAE (and potentially others) combined with weaker coordination could sustain volatility and a softer price environment. Saudi Arabia’s heavier stabilisation role may lead to more pragmatic quota adjustments or unilateral actions, but it also risks exposing fractures that smaller members like Nigeria cannot easily exploit.
Conclusion
Nigeria’s path forward requires decisive action. Upstream priorities should include intensified security operations against oil theft, accelerated infrastructure upgrades, and targeted incentives to attract investment – addressing the chronic underproduction that has left the country unable to capitalise on quota flexibility. Downstream and diversification efforts remain critical: expanding refining capacity, developing gas resources, and growing non-oil sectors (agriculture, manufacturing, and services) will reduce vulnerability to crude price swings.
Diplomatically, Nigeria must engage actively within a diminished OPEC, potentially advocating for more flexible arrangements that reflect African producers’ realities. Broader economic reforms—fiscal discipline, improved revenue management, and naira stability measures—will determine whether external shocks translate into crises or catalysts for resilience.
Ultimately, the Gulf realignment and OPEC’s evolution present Nigeria with both risks and opportunities. In a world where oil market power is fragmenting, proactive domestic transformation offers the most reliable route to energy security and sustainable growth. The coming months will test whether Nigerian policymakers seize this moment or allow it to deepen existing vulnerabilities.
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Uwadiae Osadiaye is Head of Alternative Investments at FirstCap Limited
Chinonso Akujobi, former staff of Access Bank in Lagos, has been remanded in Ikoyi prison after she was arraigned on a five-count charge bordering on stealing to the tune of N294.5m.
Akujobi who is being prosecuted by the Economic and Financial Crimes Commission (EFCC) was arraigned before Justice I.O. Ijelu of the State High Court sitting in Ikeja, Lagos.
EFCC alleged that Akujobi stole the money between January and December 2025 while under the employment of Access Bank Plc.
As stated in one the charges, the defendant stole the money through unauthorized payments from the general ledger of Access Bank to her account number 0036668871 with the name Chinonso A., Uchechi A. and Florence A., thereby committing an offence of stealing, contrary to Section 280 and punishable under Section 287 of the Criminal Law of Lagos State, 2015.
The defendant pleaded “not guilty“ to the charges when they were read to her.
In view of this, S.M.Yabo, prosecution counsel, asked the court for a trial date and also prayed for the remand of the defendant in a Correctional centre.
Justice Ijelu, thereafter, adjourned the case till October 8, 2026, for the hearing of the bail application and the commencement of trial.
The Judge also ordered that the defendant be remanded in the Ikoyi correctional Centre.
The Nigerian Safety Investigation Bureau (NSIB) says the flight captain of the VMO Aero aircraft that landed on a roadway near Asaba Airport in Delta State told investigators that the observer pilot mistakenly identified the paved road as the runway before touchdown.
The bureau disclosed this in a preliminary report released on Thursday on the June 10 incident, which prompted the Nigeria Civil Aviation Authority (NCAA) to ground the private jet.
The aircraft had seven people on board, including the pilot-in-command (PIC), second-in-command (SIC), an observer pilot, a cabin crew member and three passengers.
According to the report, the aircraft was cleared by Air Traffic Control (ATC) to approach Runway 11 at Asaba Airport after the crew requested a right orbit.
The crew initially discontinued the approach, executed a missed approach and repositioned for a second landing attempt.
NSIB said the crew reported that the aircraft’s navigation systems indicated it was correctly established on the published RNAV Runway 11 approach.
“The PIC and SIC reported that the observer pilot identified the paved surface ahead as the runway,” the report stated.
However, the observer pilot gave investigators a different version of events.
According to NSIB, he said the aircraft remained inside cloud until late in the approach and that the Ground Proximity Warning System (GPWS) repeatedly issued “TERRAIN, TERRAIN, PULL UP” alerts.
He also said he observed a telecommunications mast directly ahead and instructed the flight captain to abandon the approach and climb immediately.
The bureau further disclosed that a cabin crew member reported that one of the passengers became concerned after overhearing discussions among the pilots and asked whether one of them was undergoing training. The passenger was reportedly reassured that all three pilots on board were experienced captains.
NSIB said no abnormal events were reported in the cabin before touchdown.
The aircraft eventually landed at about 8:57 a.m. on an under-construction paved roadway near Asaba Airport instead of the designated runway.
The bureau said its investigation into the incident is ongoing, while the preliminary report highlights conflicting accounts among the cockpit crew over the circumstances that led to the erroneous landing.
European Union has warned Meta Platforms Inc. that it could face a significant financial penalty unless it changes what regulators describe as the “addictive design” features of Facebook and Instagram.
The European Commission issued the warning in preliminary findings released on Friday, saying Meta had failed to sufficiently address risks posed by its platforms, particularly to children and vulnerable users.
The Commission said features such as infinite scrolling, personalised content recommendations and automatic video playback were designed in ways that encouraged excessive engagement with the platforms.
EU Executive Vice-President for Tech Sovereignty, Security and Democracy, Henna Virkkunen, said protecting the physical and mental well-being of European citizens should be a priority for social media companies.
The Commission said Meta should consider introducing design changes, including disabling autoplay and infinite scrolling by default, providing effective screen-time reminders and adjusting recommendation systems to reduce the focus on maximising user engagement.
The findings were issued under the European Union’s Digital Services Act (DSA), which sets obligations for major online platforms to address risks associated with their services.
Meta, however, rejected the Commission’s conclusions, saying it disagreed with the findings but would continue engaging with European regulators.
The company said it had already implemented measures aimed at protecting younger users, including Teen Accounts that allow parents to manage screen time limits and restrict access during night hours.
The EU said its investigation, which began in 2024, found that existing time-management tools on Facebook and Instagram could easily be bypassed, while parental controls required technical knowledge that limited their effectiveness.
Regulators also expressed concerns over children’s nighttime use of the platforms and the possibility that features such as Reels and Stories could encourage compulsive behaviour.
If the Commission’s preliminary findings are confirmed, Meta could face a fine of up to six per cent of its annual global revenue under the DSA.
The warning comes as the EU steps up efforts to strengthen online safety measures for children, with an expert panel established by European Commission President Ursula von der Leyen expected to present recommendations on protecting minors online.
Several EU member states, including France, have also supported discussions on restricting social media access for children, following Australia’s decision to ban users under 16 from accessing social media platforms.
Meanwhile, the Commission is continuing a separate investigation into whether Meta’s recommendation algorithms create “rabbit hole” effects by directing users towards increasingly extreme content.
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