Russia-Ukraine: OPEC Opens Oil Taps Amid War

The Organization of the Petroleum Exporting Countries (OPEC) and allied oil-producing countries on Thursday decided to stick to a modest increase in production.

During a meeting online, the alliance known as OPEC+ which includes non-member Russia stayed with its road map to gradually open the oil taps, agreeing to add 432,000 barrels per day in June.

The plan is to make those regular increases to restore cuts made in 2020 during the worst of the pandemic recession.

Analysts from Rystad Energy foresee the global market potentially losing up to 2 million barrels within six months if the 27 European Union countries approve a proposal to sanction Russian oil.

OPEC has made it clear to European officials that the oil cartel is not going to increase production to compensate for lost Russian oil.

Russia is the world’s largest oil exporter with some 12% of the global supply. Before the invasion of Ukraine, Russia sent around 3.8 million barrels of oil per day to the European Union, where refineries turn it into gasoline and diesel fuel.

It is claimed that if the EU succeeds with its plans to phase out crude imports in six months, Russia could try to sell those barrels to countries in Asia that are not participating in the boycott.

Bjornar Tonhaugen, head of oil markets research at Rystad Energy said: “Higher prices could be around the corner."

“The oil market has not fully priced in the potential of an EU oil embargo, so higher crude prices are to be expected in the summer months if it’s voted into law.”