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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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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.