OPEC is concerned that a potential European Union embargo on Russian oil imports would hurt consumers, and has relayed those concerns to the EU, Reuters reported exclusively on Thursday, quoting OPEC sources.
Russia is OPEC’s key non-OPEC partner in the OPEC+ production agreement, which has been managing supply to the market for several years now. OPEC+ and OPEC have not officially commented on the Russian invasion of Ukraine as the organization usually steers clear of geopolitical commentary or comments on the rule of law or policies in its member states.
The OPEC+ group decided in early March to rubberstamp another 400,000 barrels per day (bpd) increase in its collective oil production in April, despite soaring oil prices after a key member of the pact, Russia, invaded Ukraine a few days prior to the OPEC+ meeting. During the short meeting on March 2, OPEC+ decided to leave its production plan as-is and didn’t mention the Russian war in Ukraine, which was the reason why oil prices jumped to above $100 per barrel for the first time since 2014.
OPEC officials have met in recent weeks with EU officials, and OPEC has made clear its concern about a possible EU ban on Russian oil, Reuters’ sources said.
An official at the EU, for their part, commented on the meeting for Reuters that “OPEC presented their analysis of the oil market situation and informed us of their plans in terms of oil production.”
Nothing is off the table about additional EU sanctions against Russia, the EU official told Reuters.
Earlier this week, oil prices jumped after EU ministers gathered to discuss the idea of potentially joining the U.S. in banning imports of Russian oil. Ministers, however, failed to come to an agreement about whether to punish Putin with an oil embargo. Some small EU members, including Lithuania, pushed for an embargo, but the biggest economy, Germany, was against it.
By Charles Kennedy
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