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OPEC Warns The EU That Replacing Russian Oil Will Be “Nearly Impossible”

Replacing Russian crude oil lost by a possible ban from the EU would be nearly impossible, OPEC Secretary General Mohammad Barkindo said today in a speech at a high-level meeting between OPEC and the EU was seen by Reuters.

OPEC wasn't sugar-coating the harsh realities of the oil supply situation should the EU choose to ban imports of Russian crude oil in response to Russian President Vladimir Putin's invasion of Ukraine.

"We could potentially see the loss of more than 7 million barrels per day (bpd) of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions. Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude," the Secretary General said.

The EU, like others before it, implored OPEC to increase crude oil output. OPEC has thus far decided to stick to its agreed-upon oil production hikes of just 400,000 bpd on the grounds that the market issues are geopolitical and not fundamental—and therefore beyond OPEC's control.

The EU has not yet banned imports of Russian oil and gas, but new humanitarian rights issues have triggered an increased fervor in replacing potentially banned Russian barrels in an effort to choke off Russia's income stream.

Russia's crude oil shipments rebounded in the first week of April to the highest level so far this year, with Russia's Q1 trade surplus hitting record levels as the prices of oil and gas continue to be elevated. While it has been noted that large Asian buyers such as India and China continue to import oil and gas from Russia, so does the EU.

Russia expects to earn $9.6 billion more in April from oil and gas than it did in March.

By Julianne Geiger for Oilprice.com

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  • steve Clark on April 12 2022 said:
    Russian Oil will all end up in India and China at a discount.
  • Mamdouh Salameh on April 12 2022 said:
    The EU is trying in vain to persuade OPEC+ to raise its production beyond the 400,000 barrels a day (b/d) monthly. OPEC+ has made its position very clear, namely that it believes that the global oil market is still balanced despite the Ukraine conflict. Therefore, it wants to keep whatever small spare production capacity it has for use when the market becomes imbalanced.

    Moreover, OPEC+ told the EU bluntly that it is impossible now or even in the future to replace 8.0 million barrels a day (mbd) of Russian oil and products exports or even part of them.

    The EU will remain dependent on Russian gas and oil supplies well into the future.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Daniel Hangartner on April 12 2022 said:
    Alberta isn't as greedy as wishing for the whole shebang. Our workers have been and still are assisting others around the world with our advanced technology.
    It's our lack of greed that's known.

    Time for the world to kickstart Alberta for a change.

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