December 4, 2022 Russia-Ukraine News

OPEC and its allies decided on Sunday to stick to their current policy of cutting oil production, just hours before new Western sanctions on Russian crude exports took effect.

The Organization of the Petroleum Exporting Countries and other major oil producers, including Russia, said they would continue to restrict supply by 2 million barrels a day, a policy set out in October that began the month last and is expected to continue until the end of 2023.

In a statement, OPEC said Sunday’s meeting – held by videoconference – reaffirmed the decision taken in October, adding that the group was ready to meet at any time to « address market developments as necessary ».

The cuts decided in October, the largest since the start of the pandemic, have drawn criticism from the United States. The Biden administration called them « myopic » and said they would hurt low- and middle-income countries by driving up energy prices.

Since then, oil prices have instead retreated, with traders focusing on how China’s ongoing coronavirus lockdowns and global recession fears could affect demand.

The markets could however be volatile in the coming days. Europe’s ban on importing oil from Russia by sea comes into effect on Monday, adding further uncertainty to the outlook for energy supplies.

The G7 countries, the European Union and Australia agreed on Friday to impose a price cap of $60 a barrel on Russian oil shipped to other countries that have not adopted an embargo. The move, which also takes effect on Monday, aims to starve the Kremlin of revenue while avoiding a price shock by keeping Russian oil flowing to certain markets.

Moscow has already threatened to retaliate by cutting off oil supplies to countries adhering to the price cap.

What Ukraine says: Ukrainian President Volodymyr Zelensky called the decision to set the cap price at $60 a “weak position.”

« The logic is obvious: if the price limit for Russian oil is $60 instead of, for example, $30, which Poland and the Baltic countries have been talking about, then the Russian budget will receive about one hundred billion dollars a year. “, Zelensky said in his Saturday evening speech. « This money will not only go to war and not only to Russia’s sponsorship of other terrorist regimes and organizations. »