OPEC: ‘No Capacity to Replace Russia’s 7 Million Barrels of Oil Per Day’

Mohammed Sanusi Barkindo, Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), has said that there is ‘no capacity to replace Russia’s 7 Million Barrels of Oil Per Day.’

Barkindo disclosed this to reporters during an energy industry conference held on Monday, 7th March in Houston. According to Barkindo, who has served as the organisation’s top executive since 2016, Russia exports 7% of the global oil supply, representing about 7 million barrels per day.

The secretary-general downplayed OPEC’s ability to increase oil production to override bans on Russian oil. Speaking at the event, Barkindo said: “We have no control over current events, geopolitics, and this is dictating the pace of the market.” 

Barkindo made his remarks at CERAWeek, a gathering of top global energy executives. This event was remarkably coming up only a day after U.S. President Joe Biden, officially banned Russian oil imports following Canada and Britain’s ban of the same course.

Many western countries and individuals alike have ramped up pressure on Russia with a number of sanctions and bans following the country’s invasion of Ukraine. However, these sanctions were never related to Russia’s import of oil until now.

Reports also indicate that the U.S. which had earlier severed diplomatic relations with Venezuela in 2019, is meeting up in discussions for the possibility of oil trade relations. In 2019, the U.S. placed a ban on Venezuela’s oil with sole dependency on Russia. However, this desperate moment has called for a revision of both country’s diplomatic ties.

Following the U.S. ban on Russia’s oil, a number of oil and gas companies have also exited trading ties with Russia with Shell PLC being the first major western oil and gas company to announce that it will no longer buy fuel products from Russia.

How Oil Prices May Affect Nigerians

The surge in oil prices undoubtedly comes with serious implications for both oil-producing and non-producing countries – even for a country like Nigeria, which sells crude oil and buys refined oil.

Over the years, the increase in oil prices to unprecedented amounts have shown that the Nigerian government will earn more in revenue from crude oil sales. However, with the country’s oil distribution cycle, the same money earned will be given to refineries around the world to buy refined petroleum products.

The implication of this is that the Nigerian government may now need to pay more in subsidies beyond the gauge that was received from revenue of selling crude. This will impact the potential share of revenue to all the state governments and adversely affect Nigerians in the long run.