From the UAE "withdrawing from the group" to the new energy "anchor" in the fog of geopolitics

How can AI · UAE’s withdrawal from OPEC promote the rise of new energy?

(This article is authored by Sun Huaping, Associate Dean of the Beijing Research Institute, Shandong University of Finance and Economics)

In the spring of 2026, the sharp escalation of Middle Eastern geopolitical conflicts not only caused international oil prices to temporarily break through $120 per barrel but also cast a shadow of “stagflation” in the minds of global investors.

At the peak of this energy crisis, a piece of news exploded like a thunderclap—on April 28, 2026, the UAE announced it would officially withdraw from OPEC and the “OPEC+” mechanism starting May 1. As the third-largest oil producer in OPEC, contributing about 14% of capacity, the “Gulf giant” chose to part ways with this oil cartel that had lasted nearly 60 years amid the sound of gunfire.

For the traditional energy market, this seems like an old story about “division” and “loss of control”; but for the new energy industry, it is a new narrative about “revaluation of value” and “strategic upgrading.” When the supply system of fossil fuels begins to “self-destruct,” how should China’s new energy industry seize the opportunity to help build a resilient, economically viable, equitable, and sustainable global clean energy supply chain?

1. The collapse of the energy order behind “withdrawal”: a farewell to the old order

The UAE’s “withdrawal” is a microcosm of the transition between the old and new energy orders.

On the surface, this is a dispute over “quotas” and “short-term interests.” For a long time, the UAE has been extremely dissatisfied with OPEC’s production quota mechanism. Data shows that the UAE’s sustainable capacity is currently up to 4.3 million barrels per day, and by 2027, it will increase to 5 million barrels. However, OPEC’s allocation to it is only about 3.6 million barrels per day, meaning about 700k barrels of idle capacity cannot be released. From the UAE’s perspective, since it has the ability to sell more oil, why should it cooperate with Saudi Arabia’s “production cuts to maintain prices”?

Deep down, this is a “trust collapse” in geopolitical trust. In the current Iran-US-Israel conflict, the UAE is the country in the Gulf region most attacked by Iran. But neither Saudi Arabia nor other Gulf Cooperation Council members have provided sufficient security support to the UAE. As GCC diplomatic adviser Gargarash complained, “The GCC’s response shocked me.” When collective security mechanisms fail, the UAE chooses to hedge political risks with economic independence.

Behind this, it also reflects the sunset of the “oil era.”

The UAE no longer solely follows Saudi Arabia’s lead; it has an ambitious economic diversification agenda, aiming to quickly monetize its “black gold” before fossil fuel demand peaks, and to invest capital into tourism, finance, and even new energy industries. This “rushing ahead” mentality indicates that global energy supply is shifting from a “cartel era” coordinated by a few oligarchs to a chaotic era where countries “fight on their own.”

For the global economy, this precisely lays the groundwork for the certain rise of new energy.

2. From “filler” to “ballast”: the era of rigid demand for new energy

For countries worldwide trapped in “oil panic” and “gas shortages,” the UAE’s “withdrawal” has intensified the uncertainty of fossil fuel supply, pushing the urgency of “energy security” to an unprecedented height.

In Southeast Asia, due to insufficient strategic oil reserves, the Philippines has declared a state of energy emergency; in Europe, although they are trying to find alternative gas sources on the surface, soaring energy prices have crushed their industrial competitiveness. When traditional energy supply chains become expensive and unreliable, clean energy—solar, wind, and energy storage—becomes the only solution.

Data from China’s General Administration of Customs in the first quarter shows that exports of green products such as electric vehicles, lithium batteries, wind turbines, and their components increased by 77.5%, 50.4%, and 45.2%, respectively. As IMF Vice President Zhu Min said, “The world’s demand for China’s new energy equipment is rising sharply,” and in March alone, over 50 countries imported solar panels from China, setting a new record.

This explosive demand is a “political account” related to national survival and industrial security. Countries realize that relying on oil and gas through the Strait of Hormuz is akin to entrusting their lifelines to others; developing new energy is the only way to achieve energy independence.

3. Building a resilient global supply chain: what should China do?

Faced with the power vacuum in the Gulf region caused by the UAE’s “withdrawal” and the global demand for energy security, China’s new energy industry has entered a strategic window to upgrade from “product export” to “system export.” To truly play the role of “ballast,” we need to build a resilient, economically viable, equitable, and sustainable global supply chain. This requires efforts from three dimensions:

First, enhance the physical resilience of the energy system. The UAE’s confidence to “withdraw” lies in its construction of a land-based oil pipeline bypassing the Strait of Hormuz directly to Fujairah Port, establishing a physical “Plan B.” This provides a vivid lesson for China’s overseas energy projects.

In the past, our supply chains were overly concentrated on a few ports and routes. In the era of “geopolitical pricing,” it is necessary to promote physical diversification of supply chains. Chinese companies are shifting from “export” to “going abroad.” CATL’s factory in Hungary, BYD’s layout in Thailand, Longi’s expansion in Malaysia—these are not just simple capacity transfers but the establishment of regional manufacturing centers in “neutral zones” like Southeast Asia, the Middle East, and Latin America, forming a multi-center network of “Chinese core + regional centers.”

Resilience does not mean isolation but means that even if one route is blocked, there are ten others to take.

Second, enhance the economic resilience of energy. The biggest risk facing the world now is “stagflation.” The core mission of China’s new energy industry is to provide the world with inflation-fighting weapons through extreme technological cost reduction. China needs to improve “demand-side resilience” to solve the problem of new energy consumption. This means exporting not just solar panels or batteries but integrated solutions of “generation-storage-distribution-use.”

In sub-Saharan Africa, China’s “solar + energy storage” microgrids have lowered electricity prices below local diesel generators; in Europe, China’s manufactured household energy storage systems give ordinary households the confidence to resist sky-high electricity bills. The scale effect and full industry chain advantages of “Made in China” are key to making clean energy “affordable for everyone.” Only when green transformation is economically feasible will it not be a luxury for developed countries but a necessity for developing nations.

Third, enhance the sustainability of energy. The old energy order is a “center-periphery” structure—Gulf countries export crude oil, Western countries set rules and hold pricing power. When building China’s new energy supply chain, we must abandon this zero-sum thinking.

Take the UAE as an example: although it withdrew from OPEC, it does not reject energy transition. On the contrary, the UAE is actively developing hydrogen and photovoltaic projects in Masdar City. China’s cooperation with the UAE in new energy should not be a simple buyer-seller relationship but one of technology sharing and joint R&D. China can help Middle Eastern countries utilize their abundant sunlight resources to transform from “oil exporters” to “green electricity exporters” and even “green hydrogen exporters.”

This mode of “joint consultation, joint construction, and shared benefits” is the sustainable supply chain. It is not about safeguarding shipping lane security through force but about binding interests and empowering technology, so that each participant can find its place in the energy transition.

The UAE’s “withdrawal” marks the end of an era. The old era where OPEC controlled oil prices, Gulf countries sat back comfortably, and geopolitics was dictated by oil and gas flows is accelerating its departure. Replacing it is a new energy era full of volatility, decentralization, and driven by technology. In this era, energy security no longer depends on controlling oil fields but on manufacturing capacity. Whoever masters the world’s strongest manufacturing supply chain and can provide the cheapest and most stable green energy equipment will be the “anchor” in this chaotic world.

For China’s new energy industry, we must not only sell products but also build ecosystems; not only meet demand but also create security; not only go global but also integrate into the world.

(Contributed by Wang Kui, Certified Public Accountant of Zhenjiang Haina Chuan Logistics Industry Development Co., Ltd.)

First Financial’s Yicai exclusive, this article only represents the author’s views.

(This article is from First Financial)