Fallout of EU ban on Russian oil: OPEC to increase output

Adebayo Obajemu

The ongoing Russian military campaign in Ukraine has further rocked global economy with devastating effect.

Apart from the rising food shortages globally as a result of the Russian blockade of Ukrainian wheats, the recent decision of the European Union to cut 90 percent of Russian oil imports by the end of the year to decapitate Putin’s financial ability to further prosecute the war in Ukraine has led the Organisation of Petroleum Exporting Countries (OPEC) on Thursday to agree to increase its planned monthly oil output.

OPEC made the announcement at its 29th OPEC and non-OPEC ministerial meeting, according to a statement released by the organisation on Thursday.

It stated that global refinery intake is expected to increase after seasonal maintenance.

The meeting emphasized the significance of stable and balanced markets for both crude oil and refined products

On Monday, the EU said it has agreed to ban 90 per cent of Russian oil imports by the end of the year as part of sanctions for Russia’s invasion of Ukraine.

According to OPEC statement on Thursday, the organization affirmed it has decided to reiterate the decision of the 10th OPEC and non-OPEC Ministerial meeting on 12 April 2020 and further endorsed in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting on 18 July 2021.

“Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC Ministerial Meeting and the decision to adjust upward the monthly overall production by 0.432 mb/d for the month of July 2022,” the oil cartel said.

“Advance the planned overall production adjustment for the month of September and redistribute equally the 0.432 mb/d production increase over the months of July and August 2022. Therefore, July production will be adjusted upward by 0.648 mb/d as per the attached schedule.

“Extend the compensation period until the end of December 2022 as requested by some underperforming countries and request that underperforming countries submit their plans by 17 June 2022. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.

The organization’s next meeting will be held on June 30.