Russia’s Deputy Prime Minister Alexander Novak on Thursday sought to reassure markets that OPEC+ would remain functional following the shock exit of the United Arab Emirates, even as the decision intensified concerns about the future cohesion of the world’s most influential oil-producing bloc.
Speaking to Russian news agencies, Novak dismissed speculation that the UAE’s departure could trigger a price war, arguing that current market conditions are defined not by excess supply but by severe shortages caused by the ongoing conflict involving Iran and the disruption of energy flows across the Gulf.
“In the current situation, it is hard to talk about a price war when there is a shortage in the market,” Novak said, according to Interfax. “What we are seeing instead is the deepest crisis in the industry.”
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His remarks underscore how dramatically the balance of the global oil market has shifted since the outbreak of the U.S.-Israeli war with Iran. The conflict has crippled shipping through the Strait of Hormuz, the narrow waterway through which roughly a fifth of global oil and liquefied natural gas supplies normally pass. Tanker movements remain sharply below historical averages, while insurers, shipping firms, and refiners are grappling with soaring costs and mounting operational risks.
The result has been a rapid repricing of geopolitical risk across energy markets. Brent crude has climbed above $110 per barrel, while U.S. crude prices have surged close to levels last seen during earlier global supply crises. Analysts say the market is no longer responding primarily to traditional supply-demand fundamentals, but to fears of prolonged disruption to critical export infrastructure in the Gulf.
Against that backdrop, the UAE’s decision to leave OPEC carries significance far beyond the symbolic loss of one member. Abu Dhabi had long grown frustrated with production constraints imposed under the alliance’s quota system, particularly as it invested heavily in expanding output capacity. Officials in the UAE increasingly viewed the restrictions as limiting their ability to monetize investments and capture market share during a period of elevated prices.
Its exit therefore denotes a broader tension inside OPEC+: the divergence between producers seeking discipline to stabilize prices and those eager to maximize output while prices remain historically high.
The move also exposes deeper geopolitical undercurrents within the Gulf. The energy crisis triggered by the Iran conflict has sharpened differences among regional powers over production policy, export routes, and relations with global consumers. While the UAE has not signaled an immediate production surge, analysts believe the country is positioning itself for a post-crisis market in which it can operate with greater flexibility outside OPEC constraints.
For Russia, preserving the credibility of OPEC+ has become increasingly important. Since the alliance was formed in 2016, Moscow and Saudi Arabia have effectively acted as its twin anchors, coordinating production decisions that reshaped global oil pricing power. Novak’s insistence that Russia remains committed to the group is aimed at preventing perceptions of fragmentation from accelerating.
Still, traders and analysts say the UAE’s departure weakens the alliance structurally. OPEC+ has relied heavily on internal cohesion and coordinated messaging to influence market expectations. The exit of one of its largest producers risks encouraging other members to push for more autonomy, particularly once the current supply shock eases.
In the near term, however, the market remains overwhelmingly driven by scarcity. Novak acknowledged that “large volumes of oil are not reaching the market,” citing logistical breakdowns and disruptions tied to the Middle East conflict. Shipping bottlenecks, sanctions pressure, naval tensions, and restricted access to key ports have collectively tightened available supply even as global demand remains resilient.
This dynamic is feeding inflation concerns globally. Higher crude prices are already translating into rising fuel, transport, and manufacturing costs across major economies, complicating efforts by central banks to ease monetary policy. The persistence of elevated energy prices is one reason investors have become increasingly cautious about expecting aggressive interest-rate cuts from the Federal Reserve, the European Central Bank, and the Bank of England.
The broader consequence is an accelerating realignment of the global energy order. Countries are reassessing supply security, producers are seeking greater strategic independence, and consuming nations are confronting renewed vulnerability to geopolitical disruptions in the Gulf.
Novak is attempting to project stability at a moment when the oil market is increasingly defined by fragmentation and uncertainty. But the UAE’s departure has exposed the strains beneath the surface of OPEC+, raising questions not only about the future of the alliance, but about who will shape the next phase of global energy markets once the current crisis subsides.