OPEC and its allies determined Sunday to stick with their existing policy of curbing oil output, simply hours earlier than new Western sanctions on Russian crude exports come into power.
The Group of the Petroleum Exporting International locations, and different main oil producers together with Russia, mentioned they might proceed to limit provide by 2 million barrels per day, a coverage set in October that began final month and is because of run by way of the tip of 2023.
In a statement, OPEC mentioned Sunday’s assembly — held by way of video convention — had reaffirmed the choice taken in October, including that the group was prepared to fulfill at any time to “deal with market developments if obligatory.”
The cuts agreed to in October, the largest because the begin of the pandemic, drew criticism from america. The Biden administration referred to as them “shortsighted” and mentioned they might harm low- and middle-income international locations by pushing vitality costs larger.
Since then, oil costs have as an alternative pulled again, as merchants have targeted on how ongoing coronavirus lockdowns in China and world recession fears may hit demand.
Markets could possibly be risky within the coming days, nevertheless. Europe’s ban on importing oil from Russia shipped by sea kicks in on Monday, injecting additional uncertainty into the outlook for vitality provide.
G7 nations, the European Union and Australia agreed Friday to impose a price cap of $60 a barrel on Russian oil shipped to different international locations that haven’t adopted an embargo. The transfer, which additionally takes impact Monday, is geared toward depriving the Kremlin of income whereas avoiding a worth shock by preserving Russian oil flowing to some markets.
Moscow has beforehand threatened to retaliate by chopping off oil provide to international locations that adhere to the worth cap.
What Ukraine is saying: Ukrainian President Volodymyr Zelensky referred to as the choice to set the worth cap at $60 a “weak place.”
“The logic is apparent: if the worth restrict for Russian oil is $60 as an alternative of, for instance, $30, which Poland and the Baltic international locations talked about, then the Russian funds will obtain a couple of hundred billion {dollars} a 12 months,” Zelensky mentioned in his nightly deal with on Saturday. “This cash will go not solely to the battle and never solely to Russia’s additional sponsoring of different terrorist regimes and organizations.”
