“We could potentially see the loss of more than 7 million barrels per day of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions,” said OPEC’s Secretary-General Mohammad Barkindo, Reuters reported, citing a copy of his speech.
“Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude,” Barkindo told the EU, per Reuters.
OPEC and the EU met on Monday amid pressure on the EU to impose a ban on Russian oil over Russian atrocities in the Ukraine war. The trade bloc has also called on OPEC to consider increasing supply, a European Commission official told Reuters.
The EU relies on Russia for around 25% of its oil imports, but the trade bloc which has banned Russian coal and is considering an oil embargo is trying to wean itself off Russian energy. But oil prices are already up 30% year-to-date on the back of the Ukraine war due to disrupted trade flows linked to boycotts and sanctions against Russia.
OPEC’s Barkindo said the “highly volatile market” was due to political factors rather than supply and demand fundamentals of the oil market.
“These are non-fundamental factors that are totally out of our control at OPEC,” Barkindo said, per Bloomberg.
Last month, Saudi Arabia, the world’s top oil exporter, said that OPEC+ which includes OPEC and other major producers such as Russia will leave politics out of its decision-making, per CNBC.
“That culture is seeped into OPEC+, so when we get into that OPEC meeting room, or OPEC building, everybody leaves his politics at the outside door of that building, and that culture has been with us,” the country’s Energy Minister Prince Abdulaziz bin Salman told the outlet.
OPEC+ said last month that it would increase output by about 432,000 barrels per day in May to meet a recovery in demand as the pandemic eases.