- The OPEC Secretary General said that there is not enough oil capacity to compensate for the loss of supplies from Russia.
- The oil producer group has no control over price-affecting events, Mohammed Barkindo said on Monday.
- The US is reportedly ready to go it alone with a ban on Russian oil imports due to the war in Ukraine.
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According to the OPEC secretary general, Russian oil exports are critical to world supplies, and there are no sources that can offset the millions of barrels the country contributes.
The US is considering a ban on oil imports from Russia because of the war with Ukraine, and there are fears that Russia could redirect its volumes in response to Western sanctions. This sparked a debate about whether there are alternatives to Russian oil on deck.
“There is no capacity in the world that could replace 7 million barrels a day,” OPEC chief Mohammed Barkindo told reporters at the Ceraweek conference, Reuters reported.
Barkindo, who has been OPEC secretary general since 2016, spoke at an industry conference in Houston on Monday as oil prices soared to a 14-year high.
Brent oil last rose 1.7% to $125.15 a barrel on Tuesday, up for the third consecutive day after hitting $139.13 a barrel in the previous session. WTI rose 2.8% on Tuesday.
But Barkindo downplayed OPEC’s influence on the market as the conflict in Ukraine continues and Russia and the West trade moves and threats.
“We have no control over current events, geopolitics, and this dictates the pace of the market,” he said.
So far, OPEC and its allies, known as OPEC+, have shown no interest in boosting output, leading some analysts to say it is helping to reduce supply.
Meanwhile, oil buyers and refiners have “self-sanctioned” by staying away from Russian supplies and looking for alternatives, market analysts say.
The US is ready to go it alone on a ban on Russian oil imports if its European allies back down, Reuters reports.
But Germany’s leader, Chancellor Olaf Scholz, said Russian energy was “essential” to the daily lives of its citizens and warned against the move.
“Supplying Europe with energy for heat production, mobility, electricity and industry cannot currently be secured in any other way,” Scholz said in a statement.
The threat of an import ban prompted Russia’s deputy prime minister to issue a warning and predict that oil prices could rise to $300 a barrel.
“It is absolutely clear that the rejection of Russian oil will lead to catastrophic consequences for the world market,” Alexander Novak said on state television on Monday.
Russia’s most important oil export partners Statista
The US is ready to go it alone on a ban on Russian oil imports if its European allies back down, Reuters reports.
But Germany’s leader, Chancellor Olaf Scholz, said Russian energy was “essential” to the daily lives of its citizens and warned against the move.
“Supplying Europe with energy for heat production, mobility, electricity and industry cannot currently be secured in any other way,” Scholz said in a statement.
The threat of an import ban prompted Russia’s deputy prime minister to issue a warning and predict that oil prices could rise to $300 a barrel.
“It is absolutely clear that the rejection of Russian oil will lead to catastrophic consequences for the world market,” Alexander Novak said on state television on Monday.
More: Bank of America predicts a ban on Russian oil exports could push prices up to $200 a barrel and explains why it could trigger a global recession or stock market crash.