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The Saudi-led OPEC oil cartel and allied producers including Russia did not change their targets for shipping oil to the global economy amid uncertainty about the impact of new Western sanctions against Russia that could take significant amounts of oil off the market.
The decision at a meeting of oil ministers Sunday comes a day ahead of the planned start of two measures aimed at hitting Russia’s oil earnings in response to its invasion of Ukraine. Those are: a European Union boycott of most Russian oil and a price cap of $60 per barrel on Russian exports imposed by the EU and the Group of Seven democracies.
It is not yet clear how much Russian oil the two sanctions measures could take off the global market, which would tighten supply and drive up prices. The world’s No. 2 oil producer has been able to reroute much, but not all, of its former Europe shipments to customers in India, China and Turkey. The impact of the price cap is also up in the air because Russia has said it could simply halt deliveries to countries that observe the limit but would likely also find ways to evade the cap for some shipments.
On the other side, oil has been trading at lower prices on fears that coronavirus outbreaks and China’s strict zero-COVID restrictions would reduce demand for fuel in one of the world’s major economies.
