OPEC+ after the UAE exit: the Saudi–Russian axis and quotas decoupled from physical exports, April–September 2026
ABSTRACT
This piece examines how OPEC+ coordination changed politically during the 2026 Hormuz crisis. The United Arab Emirates left OPEC with effect from 1 May 2026, reducing the group that takes monthly output decisions from eight members to seven. Sources on the exit, the seven’s August and September decisions, the October quota allocation, IEA production data and shifts in Indian and European purchasing are read through Snidal’s (1985) and Lake’s (1993) work on leadership and small groups. Saudi Arabia and Russia hold 65.9% of the October quota; three members whose exports depend on the Gulf hold 56.7%. Saudi output fell to 5.97 mb/d in August while Russia took the Indian share Saudi Arabia lost. OPEC+ has turned from a cartel managing supply into a declaratory platform preserving the post-war quota order, and the test of discipline is deferred to 2027.
1. Two conditions of cohesion
OPEC+ output decisions rest on two conditions: members accept quota discipline, and the largest producer holds spare capacity with which it can punish non-compliant members. Both eroded in 2026. On 28 April the United Arab Emirates (UAE) announced the end of its 59-year OPEC membership, effective 1 May (Enerdata, 2026). The war that began on 28 February restricted Hormuz transit and cut Saudi output to 5.97 mb/d in August (International Energy Agency [IEA], 2026). The question is how the loss of a member and the output loss of the largest member changed the function of OPEC+. The claim is that in 2026 OPEC+ ceased to be a cartel managing the supply that reaches the market and became a declaratory platform protecting the quota order that will apply after the war; Saudi Arabia and Russia issue joint decisions while taking each other’s share in Asia. The scope is April–September 2026; the focus is membership, decisions and interests, not spare-capacity arithmetic.
2. Leader, small group and discipline
Hegemonic stability theory treats stability as a public good that a dominant actor has the power and interest to supply. Snidal (1985) shows that a small group of large actors can sustain cooperation without a single hegemon, and that the dominant actor may act as a coercive power extracting contributions instead of a benevolent supplier. Lake (1993) separates leadership from hegemony: the stabilising function depends on capacity and willingness to perform it.
Saudi spare capacity serves the other members in two ways: cutting supply to defend a price floor, which corresponds to Snidal’s benevolent leader, and raising output to remove the gains from violations, which corresponds to his coercive power. Gholz and Press (2010) argue that the market usually adjusts to disruptions through spare capacity, stocks and rerouting, and treat closure of a chokepoint such as Hormuz as the case in which that adjustment is strained. In 2026 most spare capacity sits inside the chokepoint. The expectation is that when the leader can perform neither function, the member bearing the highest cost of discipline leaves, and the remaining group shifts from supply management to signalling.
3. The UAE exit: capacity investment against quota
When it announced its exit, the UAE was producing about 3.4 mb/d, with a 5 mb/d capacity target backed by a $150bn investment programme (Enerdata, 2026). The 1.6 mb/d gap (author’s calculation) is idle capital for a producer under a quota regime. The official statement cited national interest and capacity policy; the quota dispute with Saudi Arabia is Enerdata’s interpretation (Enerdata, 2026), used here as an explanation consistent with the capacity data, not as an established fact.
The decision came in the second month of the Hormuz restriction, when the export route, not the quota, bound the UAE. The exit therefore cost little during the war, and its return arrives when transit reopens: the UAE can pursue 5 mb/d without bargaining over quota shares as shut-in Gulf output returns. The member for which discipline was most costly left when the leader’s capacity to punish was trapped.
4. The seven: decisions on paper
With the UAE gone, the group fell from eight to seven (Ship & Bunker, 2026). Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman made increases of 188,000 b/d at four consecutive meetings and, after a cumulative 752,000 b/d, held October output unchanged on 6 September (Azubuike, 2026). The press release said the seven reaffirmed their commitment to market stability (OPEC, 2026).
The October allocation totals 31.01 mb/d: Saudi Arabia 10.478, Russia 9.949, Iraq 4.431, Kuwait 2.676, Kazakhstan 1.628, Algeria 1.007 and Oman 0.841 mb/d (ANI, 2026). Saudi Arabia and Russia account for 65.9% (author’s calculation), the narrowest form of Snidal’s small group: a partnership of two large producers. Saudi Arabia, Iraq and Kuwait, whose exports depend largely on Gulf ports, carry 56.7% (author’s calculation). More than half the quota belongs to members whose output is set by the transit regime, not by the group.
Saudi output fell from 8.24 mb/d in July to 5.97 mb/d in August, 4.45 mb/d below target, and effective global spare capacity stood at 0.22 mb/d (IEA, 2026). A producer that far below its quota can neither cut to defend a floor nor raise output to punish violations. The four-month increase of 752,000 b/d is about a third of the 2.27 mb/d Saudi Arabia lost in a single month (author’s calculation). The decisions govern the record that will set each member’s post-war baseline, not barrels in the market.
5. The Saudi–Russian axis: shared text, diverging markets
Russian exports do not depend on Hormuz and moved into markets Saudi supply had left. India bought 2.55 mb/d of Russian crude in June; Russia’s share of Indian imports rose from 23% before the war to about 50%, while imports from Saudi Arabia fell from 832,000 b/d to 349,000 b/d (Marine Insight, 2026). An Axis Bank report, noting a $3–5 discount to West Asian crude stable since 2023, attributes the shift to the supply shock, not to price (NewKerala, 2026). Russia filled the space Saudi Arabia had physically vacated; it did not buy share with discounts.
Saudi Arabia began rationing its remaining export capacity. According to Bloomberg, Aramco told at least two European refiners there would be no October allocations under term contracts, with all European buyers affected, and the same day assured at least three Asian refiners that loadings from Yanbu would start soon (Bloomberg, 2026). Riyadh’s operative instrument became the allocation of scarce barrels among buyers, not the quota.
Russia’s volume gain reached its budget only in part. Ukraine’s Foreign Intelligence Service reported that August oil and gas revenues fell to $4.9bn, the lowest since January and 55% below July, citing lower Urals prices and refinery attacks (Foreign Intelligence Service of Ukraine, 2026); as a party to the war that does not disclose its method, the source indicates direction only. Saudi Arabia’s problem is delivering volume, Russia’s is protecting revenue from the volume it delivers. The partners share an interest in preserving the quota order, while in market share one’s loss is the other’s gain.
6. Alternative readings
One reading takes the October decision as evidence that cohesion persists: seven members issued a joint text and none rejected it. It misses what the agreement concerned. Complying with a quota that does not bind costs nothing; textual unity shows that discipline was deferred, not tested.
A second reading accepts the UAE’s official explanation and rejects any link to Saudi quota friction. The argument here does not depend on that dispute: the capacity gap and the timing of the exit suffice to explain why discipline had become costliest for the UAE.
7. Outlook: Türkiye, Saudi Arabia and the World
At the 4 October meeting on November output (ANI, 2026), continuation of the joint text is more likely than a supply change; while Saudi output stays below quota, the decision will not alter barrels in the market.
The decisive test comes when transit reopens. The EIA expects shut-in output to average 5.7 mb/d in the fourth quarter of 2026 and 2.7 mb/d in the first quarter of 2027, with most flows back to pre-war levels in the second quarter of 2027 (U.S. Energy Information Administration [EIA], 2026). On that path Saudi Arabia, Iraq and Kuwait will seek to return shut-in volumes together, while the UAE moves towards 5 mb/d without a quota.
For Saudi Arabia the cost connects to the budget. The 2027 pre-budget statement of 30 September projects a 21.8% contraction in oil activity in 2026 and 12.8% real growth in 2027 (Arab News, 2026). That assumption rests on a rapid return of volume. Riyadh’s 2027 choice lies between restraining returning volume to protect price and prioritising volume to regain share lost to Russia and the UAE; the budget assumption sits closer to the second.
For Türkiye, the group’s balance matters through Kirkuk–Ceyhan. Iraq, with an October quota of 4.431 mb/d, uses this line as an outlet outside the Gulf; the one-year agreement of 1 August allocates 750 kb/d, while actual flow was about 170 kb/d in early August (Arab News Pakistan, 2026). Once quotas bind, Iraq’s ability to fill its quota will depend partly on Ceyhan, giving Türkiye bargaining room as a transit state. Weak discipline with a fast volume return would ease Türkiye’s import bill; a gradual return would delay that relief.
Globally, 2026 shows that producer coordination depends on the leader’s physical access to the market.
8. Conclusion
The UAE left OPEC when the leader’s spare capacity was trapped in Hormuz and violations had become unpunishable. Saudi Arabia and Russia hold 65.9% of the seven’s October quota and Gulf-dependent members 56.7%, a structure in which decisions regulate the post-war baseline, not supply. The axis keeps issuing joint texts, while Indian data show Russia taking the share Saudi Arabia vacated and Aramco’s European allocations show Riyadh’s instrument shifting from quota to customer allocation. OPEC+ did not break up in 2026; it deferred its test of discipline to the reopening of transit in 2027, where Saudi Arabia’s choice between volume and price and the UAE’s output policy outside the group will decide the outcome.
SOURCES
ANI. (2026, 7 September). OPEC+ keeps October oil output quota unchanged from September levels. Gulf News. https://gulfnews.com/business/energy/opec-keeps-october-oil-output-quota-unchanged-from-september-levels-1.500665366
Arab News. (2026, 30 September). Saudi Arabia projects 2027 budget deficit at 3.6% of GDP. https://www.arabnews.com/business/saudi-arabia-projects-2027-budget-deficit-at-36-of-gdp-3003927
Arab News Pakistan. (2026, 1 August). Turkiye, Iraq sign one-year oil pipeline deal. https://www.arabnews.pk/node/2653014/middle-east
Azubuike, E. (2026, 6 September). OPEC+ pauses oil output hikes after four straight monthly increases. Nairametrics. https://nairametrics.com/2026/09/06/opec-pauses-oil-output-hikes-after-four-straight-monthly-increases/
Bloomberg. (2026, 22 September). Saudis tell Asian refiners they can soon pick up oil from Yanbu. The Edge Malaysia. https://theedgemalaysia.com/node/818893
Enerdata. (2026, April). UAE announces exit from OPEC effective 1 May 2026 after 59 years. https://www.enerdata.net/publications/daily-energy-news/uae-announces-exit-opec-effective-1-may-2026-after-59-years.html
Foreign Intelligence Service of Ukraine. (2026, 8 September). In August, Russia’s oil and gas revenues fell to their lowest level since the beginning of 2026. https://www.szru.gov.ua/en/news-media/news/in-august-russias-oil-and-gas-revenues-fell-to-their-lowest-level-since-the-beginning-of-2026
Gholz, E., & Press, D. G. (2010). Protecting “the prize”: Oil and the U.S. national interest. Security Studies, 19(3), 453–485. https://doi.org/10.1080/09636412.2010.505865
International Energy Agency. (2026). Oil market report – September 2026. https://www.iea.org/reports/oil-market-report-september-2026
Lake, D. A. (1993). Leadership, hegemony, and the international economy: Naked emperor or tattered monarch with potential? International Studies Quarterly, 37(4), 459–489. https://doi.org/10.2307/2600841
Marine Insight. (2026, 24 June). India shifts to Russian oil & coal to bolster energy supplies after U.S-Iran war depletes reserves. https://www.marineinsight.com/india-shifts-to-russian-oil-coal-to-bolster-energy-supplies-after-u-s-iran-war-depletes-reserves
NewKerala. (2026, 22 September). India’s demand for Russian oil driven by supply shocks, not discounts: Report. https://www.newkerala.com/news/a/indias-demand-russian-oil-driven-supply-shocks-not-434.htm
OPEC. (2026, 6 September). Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman reaffirm commitment to market stability [Press release]. https://www.opec.org/pr-detail/1835613-6-september-2026.html
Ship & Bunker. (2026, 6 September). Seven OPEC+ members keep October oil output unchanged. https://shipandbunker.com/news/world/818090-seven-opec-members-keep-october-oil-output-unchanged
Snidal, D. (1985). The limits of hegemonic stability theory. International Organization, 39(4), 579–614. https://doi.org/10.1017/S002081830002703X
U.S. Energy Information Administration. (2026, 9 September). Short-term energy outlook, September 2026. https://www.eia.gov/outlooks/steo/archives/sep26.pdf
Furkan Mahmut Tameroglu