“ “There is no capacity in the world that could replace 7 million barrels per day.””
That was OPEC Secretary General Mohammed Barkindo talking to reporters about potential bans on Russian oil imports during an energy industry conference on Monday.
Barkindo, who has been OPEC’s secretary general since 2016, was referring to the roughly 7 million oil barrels per day (7% of the global supply) that Russia exports. Russia is the world’s top exporter of crude and oil products, Reuters reports.
And he downplayed OPEC’s ability to ramp up oil production to offset bans on Russian oil. “We have no control over current events, geopolitics, and this is dictating the pace of the market,” he said.
Barkindo made his remarks at CERAWeek, a gathering of top global energy executives by S&P Global, the day before President Joe Biden officially announced a U.S. ban on Russian oil imports. The White House is looking to ramp up pressure on Russia after the country’s unprovoked military invasion of Ukraine.
“We’re banning all imports of Russian oil and gas and energy,” Biden said in remarks from the White House on Tuesday. “That means Russian oil will no longer be acceptable at U.S. ports and the American people will deal another powerful blow to Putin’s war machine.” This includes Russian oil, liquefied natural gas and coal.
Biden admitted that Americans may feel the impact of this decision through higher gas
prices. “The decision today is not without cost here at home,” he said.
But Matt Smith, lead oil analyst for the Americas at data firm Kpler, previously told MarketWatch that the move may not necessarily lead to a sudden price increase for Americans.
“A ban on Russian crude and product imports would have a limited impact on prices, given flows of Russian energy to the U.S. are small in terms of total deliveries, and alternative sources could be found,” Smith said.
Global Brent crude oil prices were hovering above $126 per barrel on Tuesday, and the U.S. national average gas price per gallon passed the $4 mark for the first time since 2008.
The U.S. and many other Western countries have imposed numerous sanctions on Russia in recent weeks, but specific penalties related to oil had not been part of those sanctions until now. Ukrainian President Volodmyr Zelensky has pleaded with U.S. and Western officials to cut off the imports, as the Associated Press reported.