Page 8 - FSUOGM Week 22 2022

FSUOGM POLICY FSUOGM

OPEC+ mulls kicking Russia out

Other OPEC+ member SOME members of the OPEC+ oil cartel are con- Arabia soon, potentially this month, to meet
may want Russia's sidering expelling Russia from the alliance, just with Crown Prince Mohammed bin Salman
market share. as the US looks to reset relations with the group’s (MbS). Ties between the two countries have been
de-facto leader Saudi Arabia, the Wall Street strained by Biden’s decision last year to scale back
Journal reported on May 31. support for Saudi Arabia’s military campaign in
Russia, Saudi Arabia and other leading oil Yemen.
producers have been co-ordinating oil supply for “There’s been too much shuttle diplomacy for
five years, restricting how much crude is released this to be smoke and mirrors about a US-Saudi
onto the market in a bid to keep prices high. reset,” RBC strategist Helma Croft said in an
Excluding Russia could allow Saudi Arabia, the interview with Bloomberg.
UAE and other members to significantly ramp Europe, meanwhile, is anxious to tap addi-
up supply, which would help bring down soaring tional oil supply to help fulfil its goal of cutting
oil prices, providing some comfort to consumers Russian oil imports by 90% by the end of the year,
in Europe and the US. in order to deprive Moscow of revenues to fund
OPEC+ have been gradually been bringing its war in Ukraine.
extra supply back online, but difficulties that Russian Foreign Minister Sergei Lavrov was
Russia has had in exporting crude amid fallout also in Saudi Arabia, where both men praised the
from its war in Ukraine and standoff with the importance of OPEC+ co-operation, according
West have caused the country’s output to drop to his ministry, signalling that the kingdom may
by 8% this year, according to the International not be in favour of pushing Russia out of the
Energy Agency (IEA). This means that OPEC+ alliance.
as a whole is set to produce significantly less than “They noted the stabilising effect that the tight
its quota. co-operation between Russia and Saudi Arabia
There is no formal plan for OPEC+ to has on world markets for hydrocarbons in this
increase production to make up for Russian strategically important sector,” the ministry said
losses, although some members in the Per- in a statement on its website.
sian Gulf intend to raise output in the next few Saudi Arabia has not commented on the
months. The group is due to meet on June 3, matter.
when they are expected to approve a planned Beijing has not signalled anything of the sort,
increase of 432,000 barrels per day (bpd) the fol- and nor have there been any reports of such, but
lowing month. China also has some interest in seeing OPEC+
In the US, the Biden administration is under release the oil taps, given that it is, after all, the
pressure to bring down gasoline prices ahead world’s biggest oil importer. However, the Chi-
of the midterms in November this year. Presi- nese government must balance this with its polit-
dent Joe Biden is anticipated to travel to Saudi ical interest in ensuring stability in Russia. ™

P8 www. NEWSBASE .com Week 22 02•June•2022