[BUG] Auth conflict warning is a regression — local ANTHROPIC_API_KEY should not conflict with global OAuth login

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Since a recent update, setting ANTHROPIC_API_KEY as a local environment variable in a single shell session triggers an auth conflict warning. The suggested remediation — running claude /logout — removes the OAuth token globally from ~/.claude/, breaking all other concurrent sessions that rely on the claude.ai login.

Previously, a locally set ANTHROPIC_API_KEY simply took precedence in that session. No conflict, no warning. Other sessions continued using OAuth normally.

What Should Happen?

• A locally set ANTHROPIC_API_KEY should take precedence in that session without warning
• Other sessions using OAuth should remain unaffected
• No global logout should be required

This is a common use case: running multiple Claude Code sessions simultaneously — e.g. one with OAuth for regular project work, another with ANTHROPIC_API_KEY for a custom endpoint or Azure.

Error Messages/Logs

⚠ Auth conflict: Both a token (claude.ai) and an API key (ANTHROPIC_API_KEY) are set.
This may lead to unexpected behavior.
  • Trying to use claude.ai? Unset the ANTHROPIC_API_KEY environment variable,
    or claude /logout then say "No" to the API key approval before login.
  • Trying to use ANTHROPIC_API_KEY? claude /logout to sign out of claude.ai.

Steps to Reproduce

1. Log in to claude.ai via claude /login
2. Open a separate shell session
3. Set export ANTHROPIC_API_KEY=sk-... locally in that shell
4. Run claude
5. The auth conflict warning appears

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.68

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Windows Terminal

Additional Information

_No response_