OPEC officials tell EU of unease about proposed ban on Russian oil, sources say

LONDON, United Kingdom – Officials of the Organization of the Petroleum Exporting Countries believe a possible European Union ban on oil from its partner Russia would hurt consumers and the group has conveyed its concerns to Brussels, OPEC sources said.

Major OPEC members, such as Saudi Arabia and the United Arab Emirates, have tried to navigate a neutral course between the West and Moscow, while OPEC+, a grouping that includes Russia, has steered clear of the Ukraine issue in its policy meetings.

The EU, which relies heavily on Russian crude, has already imposed tough sanctions on Russia, including freezing its central bank’s assets. The bloc has been discussing whether and how to put sanctions on Russia’s energy industry.

OPEC officials including Secretary General Mohammad Barkindo met EU Energy Commissioner Kadri Simson on March 16 to discuss the “extraordinary times” for the energy market, Simson said on Twitter.

One of the OPEC sources said the group’s concerns were made clear to the EU. “They are very well informed,” said the source, declining to be identified.

Asked for comment on the March 16 meeting, an EU official said: “OPEC presented their analysis of the oil market situation and informed us of their plans in terms of oil production.”

“As we have consistently said, nothing is off the table in terms of future sanctions,” the EU official said.

OPEC’s headquarters in Vienna did not immediately respond to a request for comment.

Oil prices have surged to their highest levels since 2008 on supply concerns arising from events in Ukraine, boosting fuel prices for consumers that were already facing higher inflation as economies recover from the COVID-19 pandemic.

Russia is an ally of OPEC and co-chairs the OPEC+ group of producers which since 2017 has cooperated on oil supply to support oil markets.

While the United States and Britain have targeted Russian oil, this is a divisive choice for the EU, which relies on Russia for 40% of its gas.

EU foreign ministers disagreed on Monday, March 21, on whether and how to impose sanctions on Russian energy.

Stopping short of a ban on Russian oil would indicate EU members were “persuaded by their energy realities, not their wishes,” the OPEC source said. – Rappler.com