OPEC Secretary General Mohammed Barkindo, in his speech at the EU-OPEC energy dialogue, said that it is almost impossible to substitute oil exports from Russia to the European Union.
He warned that as a result of sanctions and various restrictions on Moscow, about 7 million barrels of Russian liquid hydrocarbons per day could leave the world market. According to the OPEC Secretary General, this could trigger one of the most serious crises in the oil market in history.
“Given the current demand forecast, it would be nearly impossible to offset a volume loss of this magnitude,” Barkindo said. Said.
He said that OPEC could not control the current crisis in the world oil markets because the volatility in these markets was due to non-fundamental factors. According to him, the EU needs to take a realistic approach to the energy transition.
Barkindo said that OPEC could use its reserve production capacities to overcome the crisis, but the market was primarily affected by political rather than economic factors.
Earlier, the G7 countries called on oil and gas producers to increase supply on the world market in order to reduce dependence on Russian energy resources.
On April 11, Luxembourg hosted a meeting of the Foreign Ministers of EU countries, where they considered additional steps related to Russia’s military operation in Ukraine, including sanctions against Moscow.
Ministers discussed the issue of a pan-European embargo on imports of Russian oil and gas, but The agreement on the rejection of energy sources from the Russian Federation could not be reached. The European Union has repeatedly announced that a possible embargo on Russian energy carriers is being discussed, but the ban on imports of Russian oil was not included in the fifth block of sanctions on April 7.
“This cannot stop the Russian army”
The head of European diplomacy, Josep Borrell, believes that the EU’s rejection of oil and gas from Russia will not quickly stop Russia’s military special operation.
“Let’s not be delusional: If we stop importing gas and oil today, that won’t stop the Russian army in the coming weeks,” the diplomat said.
Borrell emphasized that the European Union is ready to continue providing military aid to Ukraine, and reminded that the EU has already allocated 1.5 billion Euros for these purposes.
No unity in the embargo
The Financial Times newspaper previously reported that significant disagreements continued among EU countries regarding the embargo on oil and gas supplies from Russia. The publication noted that the rejection of Russian oil is “a complex issue, both technically and politically” for some EU members.
This was confirmed in Luxembourg by Swedish Foreign Minister Ann Linde. According to him, they are trying to persuade opponents of sanctions, for example, Hungary, by talking about possible alternatives to Russian energy carriers.
“Many countries have started a green transition, we have a bid for the US gas supply,” he said. I had bilateral talks with a Hungarian colleague who never changed his position,” he said.
Hungarian Foreign Minister Peter Szijjarto said that the Hungarian government continues to oppose the ban on energy supply from the Russian Federation and plans to defend its position at EU meetings.
“We have already decided that crude oil and natural gas imports will not be subject to sanctions. “This position needs to be defended over and over again,” he said.
Hungary also opposes sending military aid to Ukraine. Commenting on Budapest’s reluctance to send aid to Kiev and pass it through its territory, Josep Borrell stressed that Hungary “still participates in the allocation of funds from the EU budget for Ukraine, since decisions on the allocation of these funds were taken unanimously”. “
Gabrielius Landsbergis, Deputy President of the European Commission, Minister of Foreign Affairs of Lithuania, The EC has already started working on the sixth package of sanctions against Russia.. It is assumed that the new sanctions bloc will contain provisions regarding the EU embargo on Russia’s oil supply. According to him, the European Commission is actively trying to “reconcile” among European countries on this issue.
About 40% of the oil imported by the European Union comes from Russia, but individual countries of the community are much more dependent on Russian resources. For the oil supply ban to be introduced, all 27 EU countries must support this measure. According to the Financial Times, Brussels is discussing not only a complete ban on Russian oil, but also less stringent measures, especially the introduction of taxes.
What’s going on in the oil market?
World oil prices hover around $100 a barrel as some European refiners refuse to supply Russian raw materials. In March, the US banned the import of oil and other energy products from the Russian Federation, and the UK plans to declare an embargo by the end of 2022.
Russian President’s Spokesperson Dmitry Peskov had previously warned that the EU’s ban on oil imports from Russia would negatively affect the continent’s energy balances and cause changes in the global oil market. He pointed out that the US would “feel much better than the Europeans”.
Borrell had previously expressed hope that in the event of an escalation in Ukraine, the EU would not have to completely abandon oil and gas in Russia.
“40 percent of our gas imports come from Russia. “You can’t change it overnight,” said the head of European diplomacy.