On Monday, the Organization of Petroleum Exporting Countries (OPEC) informed the European Union that Russia crude oil sanctions will erase about 7 million barrels per day from the global oil market.
According to Reuters, the cartel warned European Union member nations that it would be impossible to replace 7 million barrels per day given the current demand level and disruption in supplies.
OPEC Secretary-General Mohammad Barkindo was quoted as saying, “we could potentially see the loss of more than 7 million barrels per day (bpd) of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions,”
“Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude.”
However, European Union representative encouraged OPEC to proffer solutions that will increase Crude Oil deliveries inorder to curb the continuous increase price of crude oil in the globa market. This the EU believes is the responsibility of OPEC
Following the sactions imposed by Washington and Brussels on Moscow last month, the price of crude oil reached a 14-year high. This promted the United States and International Energy Agency request to OPEC to increase the global supply of crude oil to the market in other to regulate price.
However, OPEC Sec. Gen. Barkindo said the current highly volatile market was a result of “non-fundamental factors” outside OPEC’s control, in a signal the group would not pump more.
OPEC+, which consists of OPEC and other producers including Russia, will raise output by about 432,000 barrels per day in May, as part of a gradual unwinding of output cuts made during the worst of the COVID-19 pandemic.
The EU-OPEC meeting on Monday afternoon was the latest in a dialogue launched between the two sides in 2005.
Russian oil has been excluded from EU sanctions so far. But after the 27-country bloc agreed last week to sanction Russian coal – its first to target energy supplies – some senior EU officials said oil could be next.
The European Commission is drafting proposals for an oil embargo on Russia, the foreign ministers of Ireland, Lithuania and the Netherlands said on Monday at a meeting of EU foreign ministers in Luxembourg, although there was no agreement to ban Russian crude.
Australia, Canada and the United States, who are less reliant on Russian supply than Europe, have already banned Russian oil purchases.
EU countries are split over whether to follow suit, given their higher dependency and the potential for the move to push up already high energy prices in Europe.
The EU expects its oil use to decrease 30 percent by 2030, from 2015 levels, under its planned policies to fight climate change – though in the short term, an embargo would trigger a dash to replace Russian oil with alternative supplies.