Oil prices: OPEC considers pumping more as Russia output drops

The Wall Street Journal I mentioned tuesday That some members of the cartel of oil-exporting countries were considering the idea of ​​suspending the OPEC + supply agreement with Russia. This will allow countries such as Saudi Arabia and the UAE to step in and ease the supply crunch that has pushed global crude prices above $120 a barrel this week.

Saudi Arabia, the de facto leader of OPEC, has signaled to Western allies that it is ready to increase its oil production if Russian production drops significantly as a result of sanctions imposed over the invasion of Ukraine in February, the Financial Times reports. mentioned. An agreement could come as early as Thursday at a meeting of OPEC and Russian energy ministers, According to Reuters.

Saudi Arabia had previously refused US requests To increase production beyond the long-term quota agreed with Russia and other non-OPEC producers. But fears that sky-high prices could push the world into recession are prompting a rethink.

“[The] The OPEC+ meeting later today could be pivotal if Russia is granted an exemption from production quotas, which will allow major producers, Saudi Arabia and the United Arab Emirates, to ramp up exports to bridge the gap,” noted Jeffrey Haley, senior market analyst for Asia Pacific at Oanda.

He added, “None of this will ease the refining crisis that has caused gasoline and diesel prices to rise globally, but it will be rare news for the global economy and the fight against inflation.”

Russia’s invasion of Ukraine prompted Western powers to ban imports of Russian crude and refined products. The European Union agreed earlier this week to ban 90% of Russian oil by the end of this year.

Reuters quoted two sources from OPEC + on Thursday Russian oil production has fallen by about 1 million barrels per day in recent months as a result of Western sanctions.