Opinion: Canada and UAE: Carving new paths in a post-OPEC world

This article was originally published in The Calgary Herald on May 2, 2026

The United Arab Emirates has announced that it will no longer be a member of the Organization of Petroleum Exporting Countries effective May 1.

With the global and continental geopolitical storm confronting Canadians on a near-daily basis, many might understandably be inclined to let this headline pass without further reflection.

That would be a missed opportunity.

The changes happening in the UAE, OPEC and the oil market more broadly are a window into a future that will profoundly affect the Canadian energy sector and economy, well after the current U.S.-Iran confrontation in the Strait of Hormuz ends.

Despite the profound differences in geography, government and geopolitical position, Canada and the UAE have more in common than meets the eye — at least when it comes to energy.

Canada and the UAE are among a handful of upstream oil markets that are significantly expanding production. UAE’s plans to grow its production by nearly 50 per cent are the key reason for its tension with OPEC, particularly Saudi Arabia.

OPEC’s core mission is to co-ordinate production policies among its members in response to market conditions. That has rarely been a seamless process, due to conflicting national-level objectives — including the UAE’s current appetite to accelerate development of its immense oil reserves.

Alberta Premier Danielle Smith also aspires to grow oil production to eight million barrels per day, nearly double today’s production. This is not just an Alberta ambition. Prime Minister Mark Carney supports more oil exports to Asia and has talked about growing Canada’s liquefied natural gas exports to 100 million tonnes by 2040, six times today’s levels.

Despite the private sector-led nature of our oil sector, changes in OPEC matter a great deal to Canada. The UAE may be leaving OPEC, but will likely still co-ordinate with the Saudis when needed. This will be similar to the OPEC+ arrangement established in 2015, when Russia agreed to co-ordinate on production policy — without formally joining OPEC.

The shared motivation then was taking market share back from fast-growing U.S. shale and Canadian oilsands production. Through a series of production increases, the OPEC+ strategy worked — for a time.

During this period, investment in oil and gas in Alberta plunged dramatically.

Now, OPEC co-ordination will be more complicated. UAE will not be bound by “OPEC solidarity.” Canada, the U.S., Russia, Saudi Arabia and the UAE are the world’s big five oil producers. They are the countries that will shape the trajectory of global oil supply — with each pursuing its own interests.

Here is the second common thread between Canada and the UAE. In a world divided between petrostates (U.S., Russia, Saudi Arabia) and “electrostates” (China and the European Union, most notably), neither Canada nor the UAE has to choose between those two paths.

What are petrostates? As the name suggests, these are countries where oil is not only a core driver of the economy but a central feature of the country’s national power and foreign policy tool kit.

The same can be said for China’s industrial policy and export dominance in solar panels, electric vehicles and batteries. Electricity is a key element of China’s economic resilience in the current oil market shock, and through exports, subsidies and overcapacity, it is a way to influence trading partners and adversaries alike.

Canada and the UAE appear well-positioned to be major players in both. On the electrostate side, Canada is anchored by its hydroelectricity, nuclear power and critical minerals supply chains, and the UAE by its burgeoning solar power and nuclear generation. Canada looks to diversify its trade through critical minerals and nuclear fuel, and the UAE through financing solar projects in Africa and Asia.

Canada and the UAE also know what it’s like to be the little brother to the Americans and the Saudis. For both, it is tolerable in good times and insufferable when challenges arise.

For the UAE, Saudi Arabia has twice the GDP and three times the population. The UAE has tried to carve out its own space on regional security issues, bilateral relations with the U.S. and China, and fighting for a global voice through hosting global climate talks. These efforts have not always been welcomed by Saudi Arabia.

A final source of Canada-UAE common ground is investment. Smith and Carney have both visited the UAE, looking to generate investment in Canadian energy and infrastructure projects. The UAE has four sovereign wealth funds with US$2 trillion in assets, and broad mandates for sectoral and geographic diversification and reinvestment of the UAE’s vast petrodollar earnings.

This week saw Carney announce the $25-billion Canada Strong sovereign wealth fund — built not from excess oil revenues like the UAE, but from general revenue and borrowing. Nonetheless, it is another tool for Canada to partner with the UAE and other large global sovereign investors, entities that often like to see governments on the other side of the deal in some form.

Ultimately, for Canada, the UAE is a signpost for the world to come. A world with a weaker OPEC and potentially more volatile oil prices. A world with growing divisions and instability in the strategic Persian Gulf region.

A world where industrial policy and sovereign investments are reshaping traditional free-market-driven economic policy. A world where both petrostates and electrostates use energy for security and prosperity — for the benefit of themselves and their allies, and as weapons to weaken adversaries.

By leaving OPEC, the UAE is making its move.

Whether Canada can organize itself and step forward to participate as a power player in this global landscape, or whether we passively accept remaining in the U.S. shadow, divided by our own differences, remains to be seen.

Robert (RJ) Johnston is director of energy and natural resources policy at the School of Public Policy at the University of Calgary.