Russian Deputy Prime Minister Alexander Novak, quoted by the Russian news agency Interfax, downplayed fears that the UAE’s planned OPEC exit will trigger an immediate oil price war and race to the bottom. “In the current situation, what kind of price war can there be when there is a shortage in the market?” Novak said, adding with the Strait of Hormuz remaining all but closed, “a huge amount of oil isn’t reaching the market today, and demand is significantly higher than supply.” Novak said Russia and Saudi Arabia have yet to discuss the UAE’s decision to leave OPEC, effective Friday. He reiterated that Moscow has no plans to leave the OPEC+ alliance. Novak’s core message is that the global market is supply-starved as the U.S.-Iran war chokes energy flows through the Hormuz waterway. Large volumes of crude remain physically constrained, keeping global demand above available supply and limiting Abu Dhabi’s ability to flood the market in the near term. However, once Washington and Tehran strike a peace deal and reopen the Hormuz chokepoint, that’s where Abu Dhabi will be able to ramp up production outside OPEC’s quota system. That would inject a fresh wave of supply worldwide, weaken the oil [...]
