Novak does not see UAE exit from OPEC+ triggering price war amid oil supply shortage

MINERALNYE VODY. April 30 (Interfax) - The prospect of a price war due to the United Arab Emirates' exit from the OPEC+ deal to curb oil production is unlikely at the moment, since there is a supply shortage on the market, Russian Deputy Prime Minister Alexander Novak said.

"What kind of price war can there be in the current situation, when there is a shortage on the market. So we're seeing that the deep crisis in the sector is continuing. A huge amount of oil is currently not reaching the market and demand significantly exceeds supply. We are now seeing an imbalance due to serious logistical difficulties, due to the situation in the Middle East. This is all having a negative impact on the market," Novak told reporters on the sidelines of the Caucasus Investment Forum.

Asked whether Russia has discussed the UAE's exit from OPEC and OPEC+ with Saudi Arabia Novak said "We, at any rate, did not discuss these issues once."

He also said Russia does not have any plans to pull out of the OPEC+ deal.

"We, as the largest oil producing country, do not intend to withdraw from OPEC cooperation, because we believe that it mitigates the risks of oil markets during a crisis very well, and makes it possible to maintain a strategy for investment activity, the sector's development prospects and cooperation among countries on a constant basis. Therefore, we will continue to work together. Every country will speak for itself individually," Novak said.

The UAE announced on Tuesday that it is leaving OPEC and OPEC+ effective May 1. This is a strategic decision based on a long-term economic vision, the director of strategic communications at the county's Foreign Ministry, Afra Alhameli said.