The UAE is OPEC's third-largest exporter. It needs oil at just $50 a barrel to balance its books, compared with $90 for Saudi Arabia.
The UAE announced on April 28th 2026 that it was leaving OPEC, thanking the cartel's members for "five decades of co-operation". The move signals a desire for warmer relations with Israel—both are Abraham Accords signatories sharing antipathy toward Islamist extremism—and closer ties with America. Israel was delighted, seeing the departure as weakening Iran. By quitting OPEC, the UAE also signals it is developing an economy complemented by exports beyond fossil fuels. The Emiratis "have decided now is the moment to drill, baby, drill, and sell, baby, sell", according to Hussein Ibish of the Arab Gulf States Institute, an American think-tank. "They are far enough along in terms of economic diversification that they feel they should turn their oil into cash as soon as possible."
In March Muhammad bin Zayed called Iran the "enemy". Iran has launched more than twice as many drones and missiles at the Emirates as at any other Gulf state; the UAE's leaders have criticised neighbours for failing to help defend it, spurring it to reassert friendship with Israel and America. On April 22nd Scott Bessent, Donald Trump's treasury secretary, said America was considering financial support for the UAE. Leaving OPEC may please Trump, who has blamed the cartel for inflating oil prices. Last year America lifted export curbs on AI chips to Saudi Arabia and the UAE shortly after OPEC agreed to raise output quotas; the UAE may hope that more technology deals follow.
The departure further alienates the Gulf Co-operation Council, particularly Saudi Arabia. The monarchies have feuded in proxy conflicts—especially in Yemen's civil war (where the Saudis bombed Emirati arms shipments in December 2025) and Sudan (where Saudis support the government while the UAE backed a genocidal rebel force). There are signs the UAE is rethinking its ties with other international groups, such as the Arab League.
The UAE tells OPEC it produces 2.9m barrels per day (b/d), matching its quota. However, tanker-tracking data suggests the country's crude exports alone add up to 2.8m b/d, before accounting for local refining or additions to stocks. The International Energy Agency estimated the UAE's output at nearly 3.3m b/d in April 2025; some analysts put it as high as 3.4m b/d. The UAE stopped releasing detailed production data years ago.
Among OPEC+ members, the UAE has long had the most idle capacity as a share of its total, which generates frustration in Abu Dhabi. When global oil demand rebounded after covid, clashes over quotas twice led the UAE to consider leaving OPEC. In 2024 it negotiated a 300,000 b/d increase, to be phased in over 18 months, but the country's investment in new production has far outpaced its quota growth.
In the five years to 2027 the UAE is investing $62bn in new production, aiming to bring capacity to 5m b/d, up from 3.6m b/d in 2021. Adnoc, which pumps most of the territory's oil, says capacity has already nearly reached the target two years ahead of schedule.
Al Aweer, about 20km east of Dubai's city centre, is the largest fresh-produce wholesale market in the Middle East and plans to double in size. Iran supplies nine out of ten cauliflowers, tomatoes and watermelons imported by the UAE, a near-monopoly built in a few years. Some of Al Aweer's biggest wholesalers are controlled by people in power: Silal, founded to bolster food security during the covid-19 pandemic, belongs to ADQ, one of Abu Dhabi's sovereign-wealth funds; NRTC, a 50-year-old trader with 1,000 staff, is 41% owned by IHC, a conglomerate run by an Emirati royal.
The UAE counts 35,000 farming estates. In its national economic strategy, the country aims to top the Global Food Security Index by 2051. Dubai is building a two-square-km "Food Tech Valley". Abu Dhabi is planning the world's largest indoor farm, to grow 10,000 tonnes of greens a year. Sharjah is sowing 1,400 hectares with wheat. But local farms are withering: cheap Iranian imports, transported for about $2,200 per container from farm to warehouse, undercut domestic growers who must charge at least twice as much for tomatoes alone.
After the American-Israeli attack on Iran on February 28th 2026, the six members of the Gulf Co-operation Council bore the brunt of Iran's retaliation. The UAE said on March 4th that Iran had targeted it with 189 missiles and 941 drones in four days. The UAE shot down 93% of the incoming projectiles. At least seven people were killed and scores wounded across the GCC. Thousands of flights were cancelled. The bill for air-defence interceptors alone ran into the billions of dollars. Many Gulf residents were tense; some spent thousands of dollars to hitch rides to functioning airports. The UAE has long cultivated a reputation for safety and stability, drawing rich expats fleeing conflicts and taxes. The war has damaged that image. Instead of pressing Donald Trump for a ceasefire, Gulf rulers privately advised him to stay the course, fearing that ending the war prematurely would leave a wounded, hostile regime on their borders that had learned pounding the GCC was an effective way to change American behaviour.
As of March 10th the UAE reported being struck by 262 ballistic missiles, 1,475 drones and eight cruise missiles, intercepting the vast majority. More than half of Iran's attacks thus far have been aimed at the UAE. Iranian drones damaged oil refineries in Abu Dhabi and the international airport in Dubai. Iran threatened to target banks in the Gulf, leading HSBC to shut its branches in Qatar and Standard Chartered to evacuate its offices in Dubai.
Several Israeli journalists reported in unison that the UAE had joined the war by attacking a water-desalination plant in Iran, citing an unnamed "Israeli source". The UAE denied it: "This is fake news," said Ali al-Nuaimi, a defence official. The Emiratis were furious, viewing the leak as Israel trying to create a fait accompli. Dubai, the UAE's commercial hub, has long served as Iran's economic lung—a hub for both legal trade and money-laundering by IRGC-linked firms. Emirati officials are already talking about clamping down on Iranian business post-war.
The war has exposed a long-standing difference between Abu Dhabi, the UAE's capital, which is more comfortable with an assertive foreign policy and views Iran as a menace, and Dubai, which would prefer to stay neutral. Khalaf al-Habtoor, a billionaire property mogul in Dubai, posted several criticisms of the war on social media, accusing America of dragging the Gulf into danger, only to delete them later.
The UAE has sent arms to the Rapid Support Forces (RSF) in Sudan's civil war, with the support of governments in Chad, South Sudan and Kenya. The RSF's leader, Muhammad Hamdan Dagalo (Hemedti), is a UAE ally, as is Khalifa Haftar of Libya. The UAE bailed out Egypt's cash-strapped government with $35bn in 2024.
The UAE signed the Genocide Convention of 1948 on the condition that it would apply only to others, opting out of the International Court of Justice's automatic jurisdiction. This allowed it to escape an urgent ICJ request by Sudan to order the UAE to stop supporting a genocidal militia in Darfur.
The UAE is pursuing an ambitious AI strategy. Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), Abu Dhabi's flagship research institute, has released K2 Think, an efficient reasoning model with 32bn parameters built on top of Alibaba's Qwen 2.5 open-source model. Rather than train a foundation model from scratch, the university focused on post-training, and released the model as fully open-source—sharing not just the model itself but also the code and training data. K2 Think is particularly effective at mathematical and coding tasks. Eric Xing, MBZUAI's president, says this ushers in "a new era of cost-effective, reproducible and accountable AI." MBZUAI has also released Jais, an Arabic large language model, and NANDA, which speaks Hindi.
G42, a state-backed AI lab led by Peng Xiao, is central to the country's AI ambitions. The UAE was the first country after America to join OpenAI's Stargate project, later followed by Britain and Norway. It plans to open a 200-megawatt data centre in 2026, before expanding it to a 1-gigawatt cluster. K2 Think runs on a data centre filled with chips from Cerebras, an American AI-silicon startup whose dinner-plate-sized chips are optimised for inference.
Dubai's property market has matured since its earlier cycles of epic booms and busts. According to Deutsche Bank, the price per square metre of a flat in the heart of the city rose by 122% in dollar terms over the five years to late 2025—second only to Riyadh among 69 urban areas tracked by the bank. Residential prices are a fifth higher than their previous peak, reached in 2014. In the year to August 2025, total property sales came to 441bn dirhams ($120bn), a third higher than the same period in 2024.
The UAE's population has reached 11m, up by a fifth since 2020. According to Henley & Partners, the Emirates' millionaire population was expected to grow by 9,800 in 2025, more than anywhere else in the world. The biggest driver of rising house prices has been less affluent arrivals: better-educated and younger than earlier waves, they become homeowners more quickly. Less than 5% of purchasers now resell within a year, compared with 17% in 2014. Larger homebuilders, scarred by previous busts, now ask for as much as 80% of the value of a property on purchase, up from around 50% in 2020.
Despite the price rises, buying, owning and selling a $2m property in Dubai is cheaper than in Bangkok, London, Mumbai or New York, according to Savills. In July 2025 Emirati leaders introduced a programme for first-time buyers that will further lower costs and offer access to new projects. Regulatory changes have also tightened anti-money-laundering measures; brokers must now report cash sales worth more than 55,000 dirhams, and escrow accounts for off-plan developments are mandatory.
In January 2026 the UAE's civil code was amended to ease restrictions on gambling. The two-year-old gaming regulator, run by former Las Vegas executives, issued its first online betting licence in November 2025 to Play971, a local platform, and has since approved lottery operators and sports-wagering platforms. Gambling companies face stringent rules and high capital requirements and must provide five-year business plans.
In the emirate of Ras al-Khaimah, a 350-metre-tall casino owned by America's Wynn Resorts is under construction on the coast; when it opens in 2027 it will be one of the world's largest. Wynn estimates gross gaming revenue of $1.7bn annually, a third of its estimate of the potential market. Ras al-Khaimah welcomed 1.4m visitors in 2025 and expects 5.3m by the end of the decade.
A record 19.5m tourists passed through Dubai in 2025, up about 5% from the year before. The average tourist drops $1,414 per visit to the UAE—higher than in Las Vegas or Macau. Nearly 10,000 millionaires, with a total wealth of $63bn, migrated to the UAE in 2025, more than to any other country, according to Henley & Partners. Of the UAE's 12m people, an estimated 3m-4m were well-heeled foreigners and their families before the Iran war; more than 240,000 were millionaires. After the war began, enquiries about other jurisdictions from UAE-based residents rose by over 40% (Henley & Partners). Singapore's gold imports from the UAE quadrupled between January and May 2026. Big Singaporean banks such as OCBC report an uptick in net wealth inflows from Dubai. Italy has been a particular winner: high-earners pay a flat tax of €300,000 a year on foreign income. On May 18th 2026 an Iranian missile hit an electricity generator at the UAE's sole nuclear power plant.
By China's own estimates, 370,000 of its citizens live in the UAE, while 15,000 of its firms operate there. Both figures have roughly doubled since 2019. A stagnant economy at home and America's use of financial sanctions is pushing wealthy Chinese to diversify their holdings. Many private investors are looking beyond Singapore, long favoured by China's rich-listers, in search of another sunny, safe and low-tax jurisdiction.
The Dubai Multi Commodities Centre, a free-trade zone, has more than 1,000 Chinese firms—4% of the zone's total enterprises—with the number growing by as much as a quarter each year for the past three years. Across Dubai, Chinese firms range from all four of the big state banks and the biggest state oil company to tech startups such as WeRide, a self-driving car company. All three of China's big autonomous-taxi firms are on Dubai's roads. WeRide charges roughly three times as much per kilometre in Dubai as in China, making the business far more profitable.
The Chinese community is largely self-contained. Dubai offers Chinese restaurants, an entire supply chain tailored to Chinese tastes, a Chinese supermarket (Wemart), leafy greens grown in desert greenhouses, the Chinese School Dubai (a state-run institution teaching China's curriculum, opened in 2020) and even a Chinese hospital. For an investment of 2m dirhams ($545,000)—in, say, a waterfront flat—newcomers can qualify for a long-term visa. Dubai issued 158,000 such residency permits in 2023, double the tally in 2022.
Chinese have piled into Dubai's property market. Residential property prices in Dubai grew by 12% in 2025, compared with 16.5% in 2024, contrasting with China's depressed property sector. After China began cracking down on scam centres run by its nationals in South-East Asia, some cashed-up cyber-criminals shifted to Dubai, bringing hundreds of indentured workers. Several Chinese expats report being questioned by authorities when leaving China about their businesses in Dubai, in what appeared to be an attempt to stop human-trafficking.
Saudi leaders have grown frostier towards the Emiratis at oil-industry gatherings, but cannot push too hard for fear the UAE might leave OPEC—a potentially fatal blow for the cartel. The UAE is Saudi Arabia's fifth-largest export market; Saudi Arabia ranks ninth for the UAE. Bilateral trade is worth $31bn a year. Flights between Dubai and Riyadh are the world's seventh-busiest international route.
A turning point came in 2023, when Sudan tipped into civil war: the Saudis backed the army, while the UAE sent money and arms to the RSF. The Saudis saw this as dangerous meddling in a war just 200km across the Red Sea. Then came the quarrel in Yemen, where the Southern Transitional Council, Emirati-backed secessionists, unexpectedly seized territory from Saudi-backed forces in December 2025. The Saudis forced the STC to retreat and expelled the UAE from Yemen, then bombed an Emirati weapons shipment.
The Emiratis resent being treated as subordinate. Some Saudis view the UAE as a handmaiden for Israeli interests, while Emiratis accuse MBS of falling in thrall to Islamists. The UAE recognised Israel in 2020; the Saudis are willing to tolerate Islamist groups. A Saudi commentator close to the royals described the UAE as a rebellious "younger sibling"—the sort of talk that infuriates Emiratis, whose economy is more diversified and army more capable, if smaller.
UAE-based firms report facing new bureaucratic obstacles in the kingdom: lorries held up at the border and employees unable to get business visas. Emirati firms pulled out of a big defence expo in Riyadh in February 2026. Saudi-linked social-media accounts have spread unsubstantiated rumours about the health of Muhammad bin Zayed and tried to drive a wedge between Abu Dhabi and the leaders of the other six emirates. The UAE has stepped up its lobbying in Washington, where its alignment with Israel is a source of support. Lindsey Graham, a Republican senator, said on February 13th 2026: "Knock it off, Saudi Arabia." Donald Trump, despite claiming he could "easily" resolve the tensions, has been unwilling to wade in, in part because of personal and business ties to both monarchies.
Abu Dhabi created L'Imad in January 2026, a new sovereign-wealth vehicle that absorbed ADQ, an existing fund. L'Imad has large stakes in national infrastructure operators, including TAQA (a utility), AD Ports Group, Abu Dhabi Airports and Etihad Rail. Mubadala, another Abu Dhabi fund, is funding the expansion of Al Maryah Island, the emirate's financial hub, and Masdar, a renewable-energy firm. Dubai announced a stimulus package for businesses after the war began.
As the Gulf war disrupted the region, domestic investments in the funds' portfolios looked riskier. Diminished airline traffic weighed on airport operators and airlines. Average occupancy and daily rates at luxury hotels in the funds' portfolios dropped every week since the war began. Emirates Global Aluminium, a big smelter co-owned by Mubadala and Investment Corporation of Dubai, said it could take up to a year to repair damage from missile debris. Property companies such as Aldar, partly owned by Mubadala, faced plummeting residential sales and leasing activity.
Angered by Pakistan's engagement with Iran during the 2026 Gulf war—a regime that had been raining missiles on the UAE—the UAE decided on April 4th 2026 not to roll over a $3.5bn loan to Pakistan.
Iron Law of Distribution: Them that has, gets.