Europeans to Live without Russian Gas, OPEC not playing ball
If the March 31 OPEC+ meeting doesn’t decide to boost production above the earlier approved limit then the statements by European politicians about rejecting Russian oil will become meaningless.
Oil is lacking on the global market, mostly due to a forced export reduction from Russia while only some suppliers can compensate the gap in volume. All of them participate in OPEC+ together with Russia. Despite US pressure, Russia’s partners in the oil deal, Saudi Arabia and the UAE, have already stated that the alliance won’t undertake any actions with regards to Russia under political pressure. Meanwhile, oil prices have been at their peak since 2014 for a month.
Globally, no accelerated increase in production is needed, according to Alexander Kurdin, an expert at the Russian Government’s Analysis Center. In his opinion, a price hike due to political factors and accompanying logistics problems is noticeable yet in this situation it is logical for it to be cushioned by the importing states and they do have instruments for this such as using strategic oil supplies.
On the whole, in the first quarter the global oil market is balanced and this is what OPEC+ members take into account above all. Due to this, it is unlikely that they will try to achieve certain figures by April or May, supporting market stability is more important to them, the expert noted.
Currently, the oil prices are quite comfortable for OPEC+ members and the additional increase in production may substantially lower them, according to Deputy Head of the Economy of the Fuel and Energy Complex Sectors of the Center for Strategic Research (CSR) Sergey Kolobanov.
Many large producers are experiencing major pressure from the US and the EU who are urging them to increase production to compensate the imminent missing volumes due to restrictions on deliveries from Russia.
However, in addition to the UAE, only Saudi Arabia has substantial reserve capacities to quickly increase production and this country has not yet openly submitted to Western pressure, the expert pointed out.
