In a previous article written on April 30, it was noted in The UAE and OPEC that the United Arab Emirates (UAE) announced its intention to leave OPEC, largely driven by a desire to increase oil production beyond existing quota limits. The UAE possesses one of the largest oil fields in the world by proved reserves—the Upper Zakum offshore oil field. Increasing crude production would, in theory, allow the country to generate greater revenue, an obviously desirable outcome.
However, while some Middle Eastern countries are relatively well known to Western audiences, there is a good chance that the UAE itself is less well known. This article provides some background on the country, its political structure, and its economy – specifically its oil production.
What Is an Emirate?
The name of the country is the United Arab Emirates. This begs the first question: what is an emirate? An emirate is a political territory ruled by an emir. “Emir” is a historical Arabic title for a ruler or leader.
In general, emirs:
- Are hereditary rulers
- Hold very significant political authority within their territories (quasi-absolute in some cases)
An emirate can be thought of as analogous to a monarchy in many ways. For example, while Saudi Arabia is a kingdom ruled by a king, and the UAE consists of emirates ruled by emirs, both systems have very powerful, hereditary rulers.
The term “sheikh” is also commonly used to refer to very wealthy leaders in the Gulf region. A sheikh is very similar to an emir.
The Emirates of the UAE
The United Arab Emirates was formed in 1971, as the British withdrew from their former imperial holdings in the Gulf region.
Seven emirates on the eastern side of the Arabian Peninsula joined together to form a federation:
- Abu Dhabi
- Dubai
- Fujairah
- Sharjah
- Ajman
- Umm Al Quwain
- Ras Al Khaimah
Some of these emirates are more widely known internationally:
- Abu Dhabi – the capital and largest emirate, as well as the center of political power
- Dubai – a major global city and site of the Burj Khalifa – the tallest building in the world
- Fujairah – strategically located on the Gulf of Oman, outside the Strait of Hormuz, and a very important petroleum terminal for both crude and refined product exports
The rulers (emirs) of these seven emirates form the Federal Supreme Council (FSC), the highest governing body in the UAE. The FSC selects the president from among the rulers. In practice, the ruler of Abu Dhabi has consistently been chosen as president.
The current president is Mohammed bin Zayed (often referred to as MBZ). He is distinct from Mohammed bin Salman (MBS), the Crown Prince of nearby Saudi Arabia.
The Economy of the UAE
As far as Middle Eastern economies go, the UAE has an extremely diversified economy. Well less than half of its GDP is derived from the oil and gas industry. This is a statistic that would greatly surprise the casual American. The country possesses very strong financial and tourism sectors. An additional portion of that non-oil-and-gas GDP is generated by its airline industry and the now famous Emirates first class long haul flight experience.
The UAE Oil Industry
Despite this diversification, the oil industry remains enormously important to the UAE and its global role.
In 2025, the UAE produced roughly 4 million barrels of oil per day and has the capacity to substantially increase production further. A significant portion of this output is exported, making oil a key source of national revenue as well as regional and international influence.
As today’s events showed, this characteristic makes the country a prime target for Iranian attacks during the present war.
In Short
The United Arab Emirates is a federation of seven emirates located on the eastern Arabian Peninsula. Each emirate is ruled by a hereditary leader, and together these rulers form a federal governing structure that selects the country’s president.
Abu Dhabi, the largest emirate, serves as the capital and political center. Dubai is a very internationally recognized emirate, known for its business district, tourism, and the Burj Khalifa. Fujairah is the site of a major oil terminal and is especially important today due to its location outside the Strait of Hormuz.
While the UAE has successfully diversified its economy beyond oil, petroleum remains a critical component of its wealth and driver of its national policy.
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