The OPEC countries, the alliance of 23 oil-exporting countries, have decided this Sunday to maintain crude production levels.
The decision, supported by 23 states -including Russia and Saudi Arabia- takes place in the midst of a crisis between Brussels and Moscow. Last Friday, the EU -together with the G7 countries and Australia- decided to cap the price of Russian crude oil at $60 a barrel as a sanction for the war in Ukraine. And yesterday, the Kremlin responded that it would embargo the sale of crude oil to countries that carry out this measure, which comes into effect tomorrow, Monday.
The Russian oil embargo on Europe could cause a rise in prices and the decision taken this morning by OPEC goes in the direction of not preventing this rise. The measure will be in force until the next meeting of the alliance, scheduled for February 1.
The crude oil market is highly volatile and has fallen sharply in recent months to pre-war levels in Ukraine. In fact, OPEC countries approved the biggest crude production cut in two years in October and failed to prevent a fall in prices. The slowdown in the Chinese economy and the high global uncertainties are behind this scenario of high volatility.
Mariano Marzo, a UB professor specializing in Energy Resources, doubts that the EU measure and the consequent Russian embargo will cause a rise in crude oil prices, as La Vanguardia explained yesterday. In fact, the price of a Russian barrel is already around 60 dollars, therefore the EU ban may not be applied.
OPEC’s decision to keep crude oil production intact was as expected by market analysts. The “wait and see (wait and see) was planned,” says Helima Croft, says the RBC Capital analyst at the Bloomberg agency. Now, she adds, “the whole world is watching the impact of sanctions on Russian crude exports.”
