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The commodities trader says it is in compliance with EU sanctions (Photo: Trafigura)

Trafigura’s willingness to handle the Russian fuel have also sought to deter other buyers from
to Latin America has raised eyebrows, given that purchasing these commodities, but they have
the trader had previously stated its intent to turn had limited success in markets such as China
away from Russia. However, the Singaporean and India, where Russian oil and fuel continues
company had said in April that it would cease to to find customers because of their lower prices.
sign contracts for crude oil from Russian state- State-owned Petroecuador, which normally
backed producer Rosneft by May 15, the cut-off buys fuels from US refineries, commented that
set by the EU for new deals. Since this only refers Ecuador’s current priority is to overcome the
to Rosneft, it does seem to leave some leeway for ongoing supply shortage triggered by sanctions
transactions such as the shipment of Russian on Russia.
diesel to Ecuador. “Ecuador has a deficit in the supply of oil
In an effort to put pressure on Russia follow- products and our number one priority is to
ing the invasion of Ukraine, the EU and the US make up for that deficit,” the NOC said in a state-
have both imposed bans on the import of Rus- ment justifying its decision to accept deliveries
sian crude oil and petroleum products. They of Russian diesel. ™

GLOBAL
OPEC+ group reverses recent production

quota increase with first cut in 18 months

THE OPEC+ group of oil producers met this with quotas – that is, underproduction. Mem-
week to decide their next production quotas, bers have been struggling to raise output as
electing to row back on last month’s increase in they max out capacity and Russian levels are
the wake of falling prices and demand concerns. depressed by domestic economic problems
As expected, the 100,000 barrel per day (bpd) and other sanctions-related issues. As a result,
uptick added in August was removed again on the impact on markets has been muted, but the
September 6, with the group saying it would message behind the move may signal what is to
meet again on October 5. In a press release pub- come.
lished by OPEC, the group noted “the adverse While Saudi Arabia has been able to increase
impact of volatility and the decline in liquid- output to around 10.9mn bpd in July and August
ity on the current oil market and the need to from 10.7mn bpd in June, there are concerns
support the market’s stability and its efficient about its ability and desire to raise production
functioning.” towards majority state-owned NOC Saudi Ara-
It also reiterated its “readiness to make mco’s self-proclaimed 12mn bpd maximum sus-
immediate adjustments to production in differ- tainable capacity (MSC).
ent forms, if needed.” The reduction swiftly dispelled any return of
The OPEC+ group’s caution occurs against a questions about the OPEC+ group’s relevance
backdrop of concerns about a global recession and while the market’s thirst for oil has tested
and the apparently rising possibility that Iranian the top end of production, a willingness to cut
oil will return to the market. output is likely to ensure the producers keep
The quota cut is the group’s first for 18 crude prices within levels they deem acceptable
months and follows months of over-compliance – reportedly a minimum of $90 per barrel. ™

Week 36 08•September•2022 www. NEWSBASE .com P13