Russia Says UAE's 'OPECxit' Won't Spark Immediate Price War

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 cartel's ability to set a proper price floor, and raise downside risk for Brent once Gulf flows normalize.

JPMorgan analyst Ian Mitchell told clients earlier this week: 

The UAE has announced it will leave OPEC. Flat crude prices will remain driven by the situation in the Strait of Hormuz, but this development will likely mean medium-term prices are lower than they would have been otherwise, though there are many moving parts."

Mitchell added:

"Better too early than too late when it comes to taking profits on EU oil equity longs."

We agree with Mitchell's assessment:

Once the war is over there will be an oil pumpathon free for all. https://t.co/xcm6jH7cWL

— zerohedge (@zerohedge) April 28, 2026

UBS analyst Henri Patricot told clients a very similar message:

"Limited impact near-term; downside risk for oil prices medium-term." 

Overnight Brent price action commentary from UBS analyst Dominic Ellis:

Brent was briefly over $126/b this morning, and has settled above $124/b, on media reports that President Donald Trump will be briefed Thursday on new military options to pressure Iran to re-open the Strait of Hormuz.

This follows a move up on Wednesday as Trump publicly acknowledged the likelihood of an extended blockade of the Strait. In its World Economic Outlook a couple weeks ago, the IMF cut its base case for global growth for FY2026 to 3.1% from 3.4%, but this was predicated on a rapid resolution of the Iran situation and a quick resumption of energy flows. I'd argue we're moving towards more bearish scenarios which the market has yet to price in.

Readers can read the full note here: "OPECxit: JPM, UBS React To UAE's Shock Departure From Oil Cartel."

Professional subscribers can read JPM and UBS notes here at our new Marketdesk.ai portal.