The OPEC oil cartel and its allies have agreed to increase crude oil production amid rising global demand, but did not rule out Russia contributing to future increases despite its invasion of Ukraine.
Ministers representing the 13 OPEC members and 10 non-OPEC producers led by Russia, a group called OPEC +, said on Thursday that they would increase production by almost 650,000 barrels a day in July and August, almost two-thirds more than the 400,000 increases previously planned. barrels a day.
Reports earlier in the week had suggested that the cartel was considering excluding Russia from future quotas, as it could have paved the way for Saudi Arabia and the United Arab Emirates to pump more oil, but OPEC went stop before doing so.
Brent crude oil prices rose slightly after the announcement, 0.5% to $ 116.94 a barrel.
OPEC members said they had “noticed the recent reopening of blockades in the world’s major economic centers,” but did not mention the aftermath of the Ukraine conflict, which has led to oil embargoes against Russia and boosted demand. oil from other producers. Relieving Covid blockages worldwide has also increased pressure on fuel supply.
Rising demand has pushed up energy prices, pushing inflation to a 40-year high in the UK and fueling a cost-of-living crisis that has left many households struggling to cover basic costs.
Thursday’s meeting was the first since the EU agreed to a partial embargo on Russian crude oil earlier this week in hopes of “cutting off a major source of funding for its war machine”.
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While the sanctions will immediately affect 75% of Russian oil imports into the EU and affect 90% by the end of the year, oil transported through the critical Druzhba (“friendship”) pipeline will be exempt from the ban. This was a key concession to Hungary and other EU central states, such as the Czech Republic and Slovakia, which are heavily dependent on Russian oil.
Bloomberg Economics has estimated that Moscow would still receive $ 285 billion (£ 226 billion) this year for its exports of fossil fuels, including gas on which European countries are heavily dependent.
However, the EU has also reached an agreement with the United Kingdom to ban insurers from covering ships carrying Russian oil, in order to make it difficult to export energy supplies to the country.