The OPEC oil cartel and its allies have agreed to increase crude oil production amid a surge in global demand, but have not ruled out Russia contributing to future increases despite its invasion of Ukraine.
Ministers representing the 13 OPEC members and 10 non-OPEC producers led by Russia, a group called OPEC +, said on Thursday that they would increase production by nearly 650,000 barrels a day in July and August, which is nearly two-thirds more than the previously planned increase of about 400,000 barrels per day.
Reports earlier in the week suggested the cartel was considering excluding Russia from future quotas, a move that could pave the way for Saudi Arabia and the United Arab Emirates to pump more oil, but OPEC has stalled.
Brent crude oil prices rose slightly after the announcement, up 0.5% to $ 116.94 a barrel.
OPEC members said they had “marked the latest opening of blockades in major global economic centers”, but did not mention the consequences of the conflict in Ukraine, which led to an oil embargo against Russia and sparked demand for oil from other producers. Easing the blockage of Covid around the world has also increased pressure on fuel supplies.
Rising demand has pushed up energy prices, pushing inflation to a 40-year high in the UK and fueling the cost of living crisis that has forced many households to struggle to cover basic costs.
Thursday’s meeting was the first since the EU agreed to a partial embargo on Russian oil earlier this week, hoping to “cut a huge source of funding for its military machine”.
Sign up for the daily Business Today email or follow the Guardian Business on Twitter at @BusinessDesk
While the sanctions will immediately affect 75% of Russia’s oil imports to the EU and affect 90% by the end of the year, oil transported through the Druzhba critical pipeline will be released from the ban. This was a key concession for Hungary and other EU central states, including the Czech Republic and Slovakia, which are heavily dependent on Russian oil.
Bloomberg Economics estimates that Moscow will still receive $ 285 billion (£ 226 billion) this year for its exports of fossil fuels, including gas, which European countries rely heavily on.
However, the EU has also reached an agreement with the United Kingdom to ban insurers from covering Russian oil ships, making it difficult for the country to export energy supplies.
Add Comment