Potentially immense gap
OPEC: Could not compensate for Russian oil outage
April 11, 2022, 9:40 p.m
According to OPEC, a loss of Russian oil production as a result of sanctions could result in a supply gap of more than seven million barrels a day. OPEC Secretary General Barkindo explains that it is “nearly impossible” to balance this out.
OPEC has declared itself unable to compensate for any loss of Russian oil production as a result of sanctions over the war in Ukraine. The supply gap could reach more than seven million barrels per day (bpd) of oil and other liquid exports, Organization of Petroleum Exporting Countries Secretary-General Mohammed Barkindo said at a meeting with EU officials, according to a speech transcript. “Given the current demand outlook, it would be almost impossible to replace a loss of volume of this magnitude,” the text said, which the news agency Reuters saw. The barrel is the most common unit of measurement for crude oil and describes a historic 159 liter barrel.
The current market volatility is the result of factors beyond OPEC’s control, the text continues. This formulation is taken as a sign that the cartel will not increase its production. However, the EU requested a corresponding examination at the meeting in Vienna, Reuters learned from EU circles. Russian oil is currently not subject to EU sanctions but is under consideration as part of another sanctions package. Australia, Canada and the USA, on the other hand, have already banned such purchases.
The International Energy Agency (IEA) estimated in mid-March that oil shipments from Russia could fall by 3 million bpd from April. Through April 6, the decline was 0.6 million bpd after an average production of 11 million bpd in March. OPEC has rejected calls from the US and the IEA to increase its own production. Oil prices hit their highest level in 14 years last month. The dialogues between the EU and OPEC have been taking place since 2005.