OPEC tells EU that Russia oil crisis is beyond its control

OPEC’s top diplomat told European Union officials that the current crisis in global oil markets caused by Russia’s invasion of Ukraine is beyond the group’s control.

Russian oil supply losses stemming from current and future sanctions or a boycott by customers could potentially exceed 7 million barrels a day, OPEC Secretary General Mohammad Barkindo said on Monday. That would be far beyond the group’s capacity to replace, he told EU Energy Commissioner Kadri Simson, who had asserted the group’s responsibility to balance the market.

Simson said that the oil-producers group could tap its existing spare output capacity to assist in the crisis, according to an OPEC document seen by Bloomberg. Barkindo said that markets are being swayed by political factors rather than supply and demand, leaving little for the organisation to do.

“These crises have compounded to create a highly volatile market,” Barkindo said, according to the text of his opening remarks. “I must point out, however, that these are non-fundamental factors that are totally out of our control at OPEC.”

The two representatives spoke during the regular dialogue between the EU and the Organization of Petroleum Exporting Countries.

Oil prices continue to trade near $100 a barrel as many refiners shun Russian supplies following the invasion on its neighbour. The price rally has bolstered fuels like diesel, adding to the inflationary pressures and cost-of-living crisis hitting many consumers.

OPEC nations have rebuffed calls from major consumers like the US to fill in the gap left by Russia. Riyadh jointly leads an alliance of global producers with Moscow known as OPEC+.