Aramco’s Nasser sees slow recovery of oil when Strait opens

Saudi Aramco CEO Amin Nasser says no one should expect the oil market to rebound anytime soon. After the loss of 1 billion barrels with the near shutdown of the Strait of Hormuz, the vulnerability of global energy supplies is clear.

“The market will not rebalance overnight,” Nasser said Sunday, adding that any opening of Gulf shipping lanes will take time to make a substantial difference.

Prospects are dim even though Aramco reported a 26% jump in first-quarter net income to $33.6 billion, driven by higher crude prices as traders scrambled to price in war risk and supply shortages across the Gulf, Reuters reports.

Aramco has been rerouting exports through its East-West Pipeline to the Red Sea port of Yanbu to bypass Hormuz, helping Saudi Arabia keep oil flowing while attacks and shipping restrictions disrupted normal Gulf traffic.

The outlook for oil prices is hazier with the UAE’s pullout from OPEC after years of friction with Saudi Arabia and other producers over the enforcement of supply quotas to keep prices up.

UAE departure raises questions about OPEC’s future impact

The UAE’s decision to exit OPEC+ may chip away at the bloc’s influence over the oil market, but analysts say it probably won’t topple the 65-year-old organization anytime soon.

The immediate impact is likely to be more limited because the Iran war is already disrupting flows, but over time, the move could weaken OPEC+’s ability to manage production and stabilize prices.

“This exit is not about oil. It is about what oil revenues can build when they are freed from collective constraints,” Karan Gupta, a Director and strategic advisor at EY-Parthenon in Dubai, told The Circuit. It is about positioning the UAE as a strategic partner of choice for the world’s most consequential economies.”

Despite the change, Saudi Arabia and other core members are expected to keep the alliance intact, though the group may become less cohesive going forward. Outside the group, the UAE will have more flexibility to increase output without quota limits, allowing it to expand production capacity and compete for market share.

Once shipping access through the Strait of ​Hormuz is restored, the UAE will no longer be bound by OPEC+ production quotas and ​could gradually raise output, HSBC said in a research note. The bank estimates that ADNOC could lift production ‌to ⁠more than 4.5 million barrels per day, compared with an OPEC+ quota of about 3.4 million bpd for the May 2026 period.

“Signals have been there since Mohamed bin Zayed Al Nahyan became president of the UAE. His agenda made it clear that the country aims to reach 5 million barrels per day of production by 2030,” said Mirco Neri, CEO and Dubai-based Co-Founder of Anvik Capital.

Among the factors that led to the UAE’s leaving OPEC were the continuous missile barrages from Iran, even though it belonged to the organization.

“The fact that a founding member’s aggression against UAE shipping and infrastructure has contributed to another member’s departure after nearly six decades tells you everything you need to know about OPEC’s internal coherence today,” Gupta said.

The UAE’s action may also signal to other members that they should rethink their place in the group, Kristin Diwan, a Senior Resident Scholar at the Arab Gulf States Institute, told The Circuit.

“I expect Emirati anger over what they see as a lack of leadership from Saudi Arabia in the Iran crisis has led them to value political accommodation less,” Diwan said. The UAE “will openly pursue their own regional strategy, based on their ties to Israel and the U.S., and are willing to break their connections to Arab and Islamic organizations, which they see as ineffective.” 

OPEC may not collapse, but its authority is gradually eroding and supply quotas are becoming harder to enforce, said Amena Bakr, Head of Middle East and OPEC+ Insights, at data intelligence firm Kpler.

“The group has been a force of stabilization and is needed to avoid constant boom and bust cycles and ensure that investment remains in the upstream sector,” Bakr said. “I don’t think this marks the collapse of OPEC. The group will evolve from here.”