Some OPEC countries want to exclude Russia from the OPEC + agreement to increase oil production
Some OPEC members are considering suspending Russia from the OPEC + agreement that limits the amount of crude oil each member can produce, the Wall Street Journal reported Tuesday, citing OPEC delegates' rumors.
The suspension of Russia's role in the group could allow other members to increase oil production at a faster pace, although only a few OPEC members are believed to have the capacity to increase production as quickly as the current one allows. agreement. Removing Russia from the group could be a long-term or symbolic move, as part of the world continues to avoid Russian energy products, with few exceptions – most notably China and India, which have increased their imports of Russian crude.
This rejection has meant that Russian crude oil production has fallen by about 8% this year, according to data from the WSJ, instead of the increase allowed so far each month by the OPEC + agreement. This undermines the reasons for the cartel agreement, because other countries have forced themselves to reduce production quotas, ie profits, to allow Moscow to increase its quotas, which it is unable to do.
OPEC has long argued during the months of the invasion that the crude oil market is mostly balanced and that the current forces at play in the market will not be dampened by an increase in crude oil production. According to OPEC delegates who spoke to the Wall Street Journal, however, some OPEC members in the Persian Gulf are starting to plan for an increase in production in the coming months. An excessively high price of crude oil is, in the medium term, dangerous for OPEC because on the one hand it pushes non-OPEC countries to produce more, on the other hand it pushes towards the search for alternative energy sources. Ultimately it undermines global growth, setting the stage for a global crisis.
The OPEC + production quotas will still be completely canceled starting in September, although the agreement is set to last until December.
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The article Some OPEC countries want to exclude Russia from the OPEC + agreement to increase oil production comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/alcuni-paesi-opec-vogliono-escludere-la-russia-dallaccordo-opec-per-aumentare-la-produzione-di-petrolio/ on Tue, 31 May 2022 19:00:07 +0000.