Morning Highlights: Brent Hits One-Month High at $114 as U.S. Prepares Extended Iran Blockade, ADNOC Offers Out-of-Gulf Loadings

Wednesday, April 29, 2026

Market Snapshot

Brent (June) $114.38 | July Brent $107.23 | WTI (June) $103.25 Brent +3.12 (+3.0%), eighth consecutive daily gain, highest since March 31. June contract expires Thursday. WTI +3.32 (+3.4%), highest since April 13, up seven of the last eight sessions. WSJ reports Trump instructing aides to prepare extended Iran blockade; UAE quits OPEC effective May 1 after nearly 60 years; ADNOC offers customers out-of-Gulf crude loadings for June; API reports second consecutive weekly crude draw.

Bottom Line

Trump instructing aides to prepare for an extended squeeze on Iran's economy and oil exports via port blockade removes the last remaining near-term scenario under which Hormuz reopens on its own diplomatic momentum. If the blockade is indefinite and the ceasefire is effectively frozen, the Goldman end-June normalization assumption - already pushed back from mid-May - looks optimistic. The market is pricing exactly that risk across eight consecutive sessions of Brent gains.

ADNOC notifying customers they can load Murban and Upper Zakum outside the Gulf in June is the physical market's most direct acknowledgment yet that Hormuz is not opening soon. ADNOC is not offering out-of-Gulf loadings as a courtesy -- it is managing customer relationships in a world where its primary export terminal at Fujairah, already repeatedly attacked, cannot be relied upon and strait passage remains blocked. The operational significance is that UAE crude is beginning to find routing workarounds, which provides marginal relief but at significantly higher logistics cost and complexity.

The UAE's OPEC exit is the institutional story that will define energy market structure for years regardless of how the Gulf conflict resolves. Abu Dhabi has been building toward 5 million bpd of capacity through a $150 billion investment program and has been constrained by a 3.5 million bpd quota that did not reflect that investment. Outside OPEC, the UAE joins the U.S. and Brazil as a producer that pumps at will. RBC's Helima Croft identified the timing problem correctly - war damage to UAE production facilities means the capacity expansion cannot be monetized immediately, but the strategic intent is clear. Rystad's Jorge Leon, a former OPEC official, called it a significant shift and a structurally weaker OPEC going forward. The group's production share drops from roughly 50% to 45% of global output with the UAE's departure, and the precedent of the fourth-largest producer leaving without triggering a broader collapse tells other members with quota grievances that exit is a viable option.

The near-term market impact of the UAE exit is correctly assessed as limited by ANZ and ING - Hormuz being closed means UAE production increases cannot reach the market regardless of quota status. But ING's medium-term framing is the right analytical lens: once Hormuz reopens, a UAE pumping toward 5 million bpd without OPEC constraints adds supply pressure to a market that will already be dealing with recovering Gulf output from multiple producers simultaneously. The forward curve moving into deeper backwardation as that supply overhang gets priced is the logical consequence.

Top Developments

Trump Preparing Extended Iran Blockade, Diplomatic Resolution Recedes

The Wall Street Journal reported Tuesday that Trump has instructed aides to prepare for an extended blockade of Iranian ports, choosing to continue squeezing Iran's economy and oil exports rather than pursuing a near-term diplomatic resolution. The ceasefire remains in place nominally but the conflict is deadlocked with Iran refusing to address nuclear issues until hostilities end and the U.S. refusing to lift the blockade until Hormuz reopens. An extended blockade framework removes the near-term diplomatic off-ramp that Goldman's end-June normalization assumption requires and shifts the market's base case toward a longer disruption timeline.

UAE Quits OPEC Effective May 1 After Nearly 60 Years

The UAE announced its departure from OPEC on Tuesday, effective May 1, becoming the largest producer ever to leave the organization after nearly 60 years of membership. The UAE pumped approximately 3.4 million bpd before the war and has invested $150 billion in expanding capacity toward 5 million bpd, constrained by an OPEC quota of 3.5 million bpd that did not reflect that investment. Iraq confirmed it has no plans to leave. Saudi Arabia is expected to continue managing OPEC+ with remaining members, and analysts do not expect broader alliance collapse. OPEC+'s share of global production drops from roughly 50% to 45% with the UAE's departure. Long-standing tensions between Abu Dhabi and Riyadh over quotas, compounded by geopolitical divergences over Sudan, Somalia and Yemen, drove the exit decision that shocked five OPEC+ sources who spoke to Reuters.

ADNOC Offers Out-of-Gulf Crude Loadings for June

Abu Dhabi National Oil Company notified some customers they can opt to load Murban and Upper Zakum crude grades outside the Gulf in June, per two sources and a notice reviewed by Reuters. The offer is a direct acknowledgment that ADNOC cannot reliably offer Gulf-based loadings while Hormuz remains closed and Fujairah faces ongoing attack risk. Out-of-Gulf loading options carry significantly higher logistics costs and complexity but provide customers with supply certainty that Gulf-based nominations -- conditional on Hormuz reopening -- cannot deliver. ING noted that any UAE production increase from its newly unconstrained OPEC-free status requires a Hormuz resolution before it can reach the market.

API Reports Second Consecutive Crude Draw, EIA Data Due

The American Petroleum Institute reported a second consecutive weekly decline in U.S. crude inventories, with the EIA official data due today. Declining U.S. crude stocks alongside record petroleum product exports of 12.88 million bpd reported last week signal that Atlantic Basin supply is being pulled toward international markets faster than domestic production is replenishing storage. The draw dynamic supports the backwardation structure in WTI futures and reinforces the physical tightness that has driven seven of the last eight daily price gains.