As the international oil price soars amid the prolonged Iran war, an analysis has emerged that the United Arab Emirates (UAE) declaring its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC) could benefit China.
On the 29th (local time), the South China Morning Post (SCMP) in Hong Kong quoted experts as saying, "With the UAE leaving OPEC, China could benefit from additional supply," adding, "Some also see that the move could to some extent contribute to expanding financial cooperation between China and the UAE and to the internationalization of the yuan."
The UAE the previous day officially announced through state media that it would withdraw from OPEC and OPEC+ (a group of oil-producing countries that includes 10 countries such as Russia and Oman in addition to the 12 OPEC members). In recent years, the UAE has invested massive capital to expand its crude oil production capacity to 5 million barrels a day and has pushed to increase output, but it has clashed within OPEC as Saudi Arabia pressed for production cuts to defend prices.
Suhail Mohammed Al Mazrouei, UAE Energy Minister, said in an interview with CNBC that now is an "appropriate time" to withdraw, noting that more flexibility is needed than OPEC's collective decision-making structure in a supply shortage. The UAE's plan is to break away from the OPEC system and move to increase output on its own.
Experts assessed that as the UAE can independently control its oil supply volume, supply could increase and bring the effect of lowering prices. Xu Muyi, senior crude analyst at trade and logistics consulting firm Kpler, said, "From buyers' perspective, potential supply increases act as downward pressure on prices, which is positive," adding, "China is expected to increase purchases from the UAE."
In particular, from China's standpoint, which has lost major oil sources due to the arrest of Venezuelan President Nicolás Maduro in the United States and the Iran war, the UAE could be an attractive alternative. China is a country with a high import dependence, relying on imports for about 70% of its total oil consumption. Accordingly, it has worked in recent years to diversify its sources and may increase imports from the UAE. According to Kpler data, in 2025 China imported 692,000 barrels a day from the UAE, accounting for about 6% of China's seaborne crude imports.
However, tensions in the Strait of Hormuz are seen as a variable. The strait is a key chokepoint through which about 20% of the world's oil and gas shipments pass, but it is effectively blockaded as Iran threatens ships transiting the strait.
An executive at the China advisory organization of U.S. consulting firm Ankura said, "Given the UAE's significant production capacity, competition could intensify and, in an extreme case, risk leading to a price war," while adding, "There are not many options to reroute oil exports from the Gulf, and their transport capacity falls far short of the volumes that used to flow through the existing strait."
Some also say that this situation could expand financial cooperation between China and the UAE and bring China a step closer to its goal of "yuan internationalization." Gary Ng, Asia-Pacific chief economist at French investment bank (IB) Natixis, said, "If China provides sufficient incentives, the UAE could have the flexibility to selectively expand yuan-related activities," while adding, "There does not appear to be a major change to the existing petrodollar system (using dollars for oil transaction)."
There is also a view that the UAE's exit from OPEC is actually favorable to the United States. Reuters on the 28th assessed, "The UAE's withdrawal from OPEC represents a victory for President Trump, who in a 2018 U.N. General Assembly speech accused OPEC of exploiting the world by raising oil prices." CNN said, "Weakening OPEC's power could be beneficial to (U.S.) consumers in the long run."