Page 12 - aruba-today-20221205

A12 BUSINESS
Monday 5 deceMber 2022
No OPEC+ oil shakeup as Russian price

cap stirs uncertainty

By DAVID McHUGH
AP Business Writer
FRANKFURT, Germany (AP)
— The Saudi-led OPEC oil
cartel and allied produc-
ers including Russia did not
change their targets for
shipping oil to the global
economy amid uncertain-
ty about the impact of new
Western sanctions against
Russia that could take sig-
nificant amounts of oil off
the market.
The decision at a meet-
ing of oil ministers Sunday
comes a day ahead of the
planned start of two mea- Taps are photographed at a gas station in Frankfurt, Germany,
on Oct. 5, 2022.
sures aimed at hitting Rus- Associated Press
sia’s oil earnings in response
to its invasion of Ukraine. sions in the U.S. and Europe slowing, oil prices have
Those are: a European also raise the prospect of been falling since sum-
Union boycott of most Rus- lower demand for gasoline mertime highs, with inter-
sian oil and a price cap of and other fuel made from national benchmark Brent
$60 per barrel on Russian crude. closing Friday at $85.42 per
exports imposed by the EU That uncertainty is the rea- barrel, down from $98 a
and the Group of Seven son the OPEC+ alliance month ago.
democracies. gave in October for a That has eased gasoline
It is not yet clear how much slashing production by 2 prices for drivers around
Russian oil the two sanc- million barrels per day start- the world.
tions measures could take ing in November, a cut that Average gas prices have
off the global market, remains in effect. Analysts fallen for U.S. drivers in re-
which would tighten sup- say that took less than the cent days to $3.41 per gal-
ply and drive up prices. The full amount off the market lon, according to motoring
world’s No. 2 oil producer because OPEC+ members club federation AAA.
has been able to reroute already can’t meet their While U.S., European and
much, but not all, of its for- full production quotas. other allies seek to pun-
mer Europe shipments to An OPEC+ statement Sun- ish Russia for the war in
customers in India, China day pushed back against Ukraine, they also want to
and Turkey. criticism of that October prevent a sudden loss of
The impact of the price cap decision in view of the re- Russian crude that could
is also up in the air because cent weakness in oil prices, send oil and gasoline pric-
Russia has said it could sim- saying the cut had been es back up.
ply halt deliveries to coun- “recognized in retrospect That is why the G-7 price
tries that observe the limit. by the market participants cap allows shipping and
But analysts say the country to have been the neces- insurance companies to
would likely also find ways sary and the right course of transport Russian oil to non-
to evade the cap for some action towards stabilizing Western nations at or be-
shipments. global oil markets.” low that threshold. Most of
On the other side, oil has The White House, which the globe’s tanker fleet is
been trading at lower pric- has pressed for more oil covered by insurers in the
es on fears that coronavi- supply to keep gasoline G-7 or EU.
rus outbreaks and China’s costs down for U.S. drivers, Russia would likely try to
strict zero-COVID restric- at the time called the cut evade the cap by organiz-
tions would reduce de- “shortsighted” and said the ing its own insurance and
mand for fuel in one of the alliance was “aligning with using the world’s shadowy
world’s major economies. Russia.” fleet of off-the-books tank-
Concerns about reces- With the global economy ers, as Iran and Venezuela
have done, but that would
be costly and cumber-
some, analysts say.
The cap of $60 a barrel is
near the current price of
Russian oil, meaning Mos-
cow could continue to sell
while rejecting the cap in
principle. Oil use also de-
clines in the winter, in part
because fewer people are
driving.q