VIENNA\u2014 Major oil-producing countries led by Saudi Arabia and Russia agreed to maintain their current output levels in a climate of uncertainty and ahead of fresh sanctions against Moscow coming into force next week.<\/p>\n
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The representatives of the 13 members of the Organization of the Petroleum Exporting Countries (OPEC) led by Riyadh, and their 10 allies headed by Moscow, decided to stick to their course agreed in October of a production cut of two million barrels per day until the end of 2023.<\/p>\n
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OPEC+ described its October decision to cut as one \u201cwhich was purely driven by market considerations\u201d, adding that it had been \u201cthe necessary and the right course of action towards stabilizing global oil markets\u201d, a statement said.<\/p>\n
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The next OPEC+ ministerial meeting is scheduled for June 4, 2023.<\/p>\n
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But the alliance said it was ready to \u201cmeet at any time and take immediate additional measures\u201d to address market developments and support the oil market if necessary.<\/p>\n
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On Friday, the EU, G7 and Australia agreed a $60-per-barrel price cap on Russian oil, which will come into effect on Monday or soon after, alongside an EU embargo on maritime deliveries of Russian crude oil.<\/p>\n
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It will prevent seaborne shipments of Russian crude to the European Union, which account for two thirds of the bloc\u2019s oil imports from Russia, an attempt to deprive Moscow\u2019s war chest of billions of euros.<\/p>\n
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While Russia denounced on Saturday the incoming price cap, threatening to suspend deliveries to any country that adopted the measure, Ukraine suggested the cap should have been set even lower.<\/p>\n
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For OPEC+, the big unknown in the oil equation is how heavily sanctions will hit Russian supply.<\/p>\n
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\u201cUncertainty on the impact on Russian oil production coming from the EU ban\u2026 and the G7 price cap and some easing of mobility restrictions in China likely supported the decision for a rollover,\u201d UBS analyst Giovanni Staunovo said.<\/p>\n
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Moscow\u2019s threat to suspend deliveries to countries abiding by the price cap will put \u201csome in a very uncomfortable position\u201d, said OANDA analyst Craig Erlam: \u201cChoosing between losing access to cheap Russian crude or facing G7 sanctions\u201d.<\/p>\n
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Amid economic gloom fuelled by soaring inflation and fears of China\u2019s weaker energy demand due to its Covid-related restrictions, the two global crude benchmarks remained close to their lowest level of the year, far from their March peaks.<\/p>\n
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Since the group\u2019s last meeting in early October, Brent North Sea oil and its US equivalent, WTI, have lost more than six percent of their value.<\/p>\n
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Moving forward, OPEC+ might still feel compelled to adopt \u201ca more aggressive stance\u201d by cutting or threatening to cut production, UniCredit analyst Edoardo Campanella said.<\/p>\n
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\u201cRussia might also retaliate by leveraging its influence within OPEC+ to push for more production cuts down the road, thus exacerbating the global energy crisis,\u201d he added.<\/p>\n
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Source: Nam News Network<\/p>\n","protected":false},"excerpt":{"rendered":"
VIENNA\u2014 Major oil-producing countries led by Saudi Arabia and Russia agreed to maintain their current output levels in a climate of uncertainty and ahead of fresh sanctions against Moscow coming into force next week. The representatives of the 13 members of the Organization of the Petroleum Exporting Countries (OPEC) led by Riyadh, and their … <\/p>\n