“There is no capacity in the world that could replace 7 million bpd.”
It was OPEC Secretary General Mohammed Barkindo who spoke to reporters about possible bans on Russian oil imports during a conference on the energy industry on Monday.
Barkindo, who has been OPEC secretary general since 2016, was referring to the roughly 7 million barrels of oil per day (7% of global supplies) that Russia exports. According to Reuters, Russia is the world’s largest exporter of oil and petroleum products.
And he downplayed OPEC’s ability to increase oil production to offset Russian oil bans. “We have no control over current events, geopolitics, and this dictates the pace of the market,” he said.
Barkindo made his announcement at CERAWeek, a gathering of top executives from global energy companies S&P Global, a day before President Joe Biden officially announced a US ban on Russian oil imports. The White House hopes to step up pressure on Russia following the country’s unprovoked military invasion of Ukraine.
“We ban all imports of Russian oil, gas and energy,” Biden said in a speech from the White House on Tuesday. “This means that Russian oil will no longer be accepted in US ports and the American people will deal another powerful blow to Putin’s war machine.” These are Russian oil, liquefied natural gas and coal.
Biden acknowledged that Americans could feel the impact of this decision through higher gas prices RB00, -0.45% RBJ22, -0.45%. “Today’s decision does not come without cost here at home,” he said.
But Matt Smith, lead oil analyst for the Americas at data firm Kpler, previously told MarketWatch that the move would not necessarily result in a sudden rise in prices for Americans.
“A ban on imports of Russian oil and petroleum products will have a limited impact on prices, given that Russian energy flows to the US are small relative to total supply, and alternative sources can be found,” Smith said.
World Brent oil prices fluctuated above $126 a barrel on Tuesday, and the average national US gas price per gallon for the first time since 2008 exceeded $4.
The US and many other Western countries have imposed numerous sanctions against Russia in recent weeks, but specific oil-related sanctions have not yet been part of those sanctions. According to the Associated Press, Ukrainian President Volodymyr Zelensky has been pleading with US and Western officials to stop imports.