Oil producers OPEC+ began their meeting on Sunday and decided to maintain their production quotas in a particularly volatile climate, amid uncertainty ahead of new sanctions against Moscow, the backbone of the alliance with Saudi Arabia, to come into effect.
Representatives from the thirteen members of the Organization of the Petroleum Exporting Countries (OPEC), led by Riyadh, and their ten allies, led by Moscow, met via videoconference at noon for technical discussions ahead of the ministerial meeting. They agreed to maintain the two-million-bpd cut they set in October until the end of 2023.
Russian oil, the object of public attention
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The climate is particularly worrisome, with Russia being held back by price caps on its oil that the European Union, the G7 and Australia have scheduled to come into effect on Monday “or shortly thereafter.” Also on this day, the EU embargo on Russian oil transported by sea begins, which will eliminate two-thirds of its purchases in Moscow. The purpose of these measures is to deprive Moscow of the funds to finance its war in Ukraine.
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For OPEC+, the question is how this will affect the supply of Russian black gold. Analysts at the Norwegian group DNB Markets say there is “great uncertainty”: the price of a barrel of Urals oil is currently hovering around $65, barely above the ceiling of $60, suggesting a limited short-term effect. But the Kremlin has warned that it will no longer supply oil to countries that use this mechanism.
This puts some countries “in a very uncomfortable position: they have to choose between losing access to cheap Russian oil or exposing themselves to G7 sanctions,” explains Craig Erlam, an analyst at Oanda.