General Secretary of OPEC, HE Dr Mohammed Barkindo
Barkindo relieves OPEC of responsibility in Russian oil sanctions
Sopuruchi Onwuka
World’s key oil producers’ bloc, the Organization of Petroleum Exporting Countries (OPEC), has declared that it would not take responsibility in geopolitical tension that currently propels price jumps in the global oil market.
Secretary General, HE Dr Mohammed Barkindo, stated at the CERAWEEK in Houston, Texas, United States, that calls on OPEC to unlock spare capacity in the face of the prevailing sanctions on Russian petroleum export were misplaced because, according to him, emerging supply gaps surpasses existing spare production capacity.
The Oracle Today reports that there are fears in the energy market that oil prices would escalate to unprecedented highs as the United States and European Union impose ban on importation of petroleum from Russia. The ban came as part of coordinated penal sanctions on Russia for its ongoing military invasion of neighbouring Ukraine.
Oil prices inched close to $140 per barrel early in the week, just short of the record peak of $148 per barrel recorded in 2008.
Market analysts and commodity traders have projected that oil could reach $250 per barrel and stoke the prevailing global inflation as cost of products and services respond to cost of input.
Russia’s Deputy Prime Minister, Alexander Novak, had in response to sanctions banning import if Russian oil into NATO countries warned that oil prices could surge to $300 a barrel.
“It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market,” he declared.
Whereas the energy intensive industrialized western countries hosted in the North Atlantic Treaty Organization (NATO) military alliance hit Russian economy with a barrage of economic sanctions including petroleum export, the consequent gaps in global supply have put attention on OPEC for alternative supply.
Dr Barkindo stated that OPEC would not take the responsibility, pointing at the group’s limited spare capacity as members struggle to meet their production quotas.
At the extended coalition where OPEC and non-member producers led by Russia combine to regulate the global market supplies, Dr Barkindo also stated that exit of Russia from supply calculation would create immitigable deficit.
He said existing spare capacity would not compensate for the 7.0 million barrels per day (7.0 mbd) supply being rejected by the demand side of the market.
In amplifying the neutrality of OPEC and OPEC+ in the raging global tension arising from the invasion of Ukraine, Dr Barkindo made it clear that the groups have no control over the events driving prices.
“We have no control over current events, geopolitics, and this is dictating the pace of the market,” he said.
The Oracle Today reports that most of the OPEC countries including Nigeria, Angola and Gabon have struggled with meeting assigned quotas, dashing hopes that the group could quickly raise production beyond current levels at short notice.
