Status: 12/04/2022 09:13
OPEC would have to supply millions of additional barrels of oil to offset an oil embargo against Russia by Western countries. But the oil cartel doesn’t want that and says it’s not even possible at the moment.
Abandoning Russian oil seems to be difficult for EU countries at the moment. According to the OPEC oil cartel, it also sees no possibility of completely closing the oil supply gap with its own deliveries. It is also questionable whether the cartel would have any interest in him.
First coal, now oil?
After an embargo on Russian coal, EU states now want to suspend Russian oil supplies to make it more difficult for Russia to finance the war in Ukraine. Russian oil is currently not subject to EU sanctions, but is being considered as part of another sanctions package. Australia, Canada and the US, on the other hand, have already banned such purchases. Oil is easier to replace on the world market than gas supplies from Russia, on which Germany in particular is still heavily dependent.
However, the OPEC funding cartel cannot and does not want to close this gap on its own. The supply gap could reach more than seven million barrels per day (bpd) of oil and other net exports, OPEC Secretary-General Mohammed Barkindo said on Monday at a meeting with EU officials. “Given the current demand outlook, it would be nearly impossible to replace a volume loss of this magnitude.”
Signal against funding increases
The current “volatility” of the market, that is, current price fluctuations, is a result of factors that OPEC does not control. Experts see this wording as a sign that the cartel will not increase its output. According to Reuters, the EU requested a corresponding examination at the meeting in Vienna.
OPEC+, which includes not only real OPEC members but also producing countries like Russia and Venezuela, decided just over a week ago to increase production quotas moderately by 400,000 barrels a day. OPEC+ will meet again in early May.
Oil prices have dropped significantly again since the start of the war
In recent days, oil prices on the world market have moved away from the multi-year highs that were reached shortly after the start of the war in Ukraine. Today, the price of North Sea Brent oil is almost 30% lower, around US$ 100. A barrel of the American variety WTI is currently being traded at around US$ 96.
The International Energy Agency (IEA) estimated in mid-March that Russian oil shipments could drop by three million bpd from April. As of April 6, the drop was 0.6 million bpd after an average production of 11 million bpd in March.