January 27, 2023

Eureka News

All the News All the Time

The electricity and water supply in the city of Kherson has been largely restored, officials said

OPEC and its allies on Sunday decided to stick to their existing policy of curbing oil production, just hours before new Western sanctions on Russian crude exports come into force.

The Organization of Petroleum Exporting Countries and other big oil producers, including Russia, said they would continue to cut supply by 2 million barrels a day, a policy set in October that started last month and is due to run until the end of 2023.

In a statement, OPEC said Sunday’s meeting — held via video conference — reiterated the decision made in October, adding that the group is ready to meet at any time to “address market developments, if necessary.”

The cuts agreed in October, the biggest since the pandemic began, have drawn criticism from the United States. The Biden administration called them “short-sighted” and said they hurt low- and middle-income countries by driving up energy prices.

Since then, oil prices have instead declined as traders focused on how the ongoing coronavirus lockdowns in China and global recession fears could hurt demand.

However, the markets could be volatile in the coming days. Europe’s ban on imports of oil from Russia to be shipped by sea goes into effect on Monday, bringing additional uncertainty to the energy outlook.

The G7 countries, the European Union and Australia on Friday agreed to impose a $60 per barrel price cap on Russian oil shipped to other countries that have not imposed an embargo. The move, also taking effect Monday, aims to siphon revenue from the Kremlin while avoiding a price shock by keeping Russian oil flowing to some markets.

Moscow has previously threatened retaliation by halting oil supplies to countries sticking to the price cap.

What Ukraine Says: Ukrainian President Volodymyr Zelenskyy called the decision to set the price cap at $60 a “weak position”.

“The logic is clear: if the price limit for Russian oil is $60 instead of, say, $30 that Poland and the Baltic countries talked about, then the Russian budget will receive about $100 billion a year,” Zelenskyy said in his nightly statement speech on Saturday. “This money will not only be used for the war and not only for Russia’s continued sponsorship of other terrorist regimes and organizations.”