OPEC Warns EU Replacing Lost Russian Oil Supplies is Impossible

"We might possibly lose over 7 million barrels per day (bpd) of Russian oil and other liquids exports as a consequence of existing and future sanctions or other voluntary steps," OPEC Secretary General Mohammad Barkindo said in a draft of his speech obtained by Reuters.

"Given the present demand picture, it would be practically difficult to compensate for this scale of volume loss."

The European Union renewed its appeal during the conference for oil-producing nations to consider increasing supplies to help calm surging oil prices, according to a European Commission official.

EU delegates also emphasized OPEC's responsibilities to maintain stable oil markets, the source said.

OPEC has rejected requests from the US and the International Energy Agency to increase petroleum production in order to lower prices, which hit a 14-year high last month as a result of Washington and Brussels imposing sanctions on Russia in response to its invasion of Ukraine.

According to an OPEC document reviewed by Reuters, at the discussion with OPEC, the EU said that OPEC might increase output from its spare capacity.

Nonetheless, Barkindo said that the present extremely volatile market is the product of "non-fundamental variables" outside OPEC's control, indicating the organization would refrain from pumping further crude.

OPEC, which includes OPEC and non-OPEC producers including Russia, would increase supply by around 432,000 barrels per day in May as part of a gradual unwinding of output curbs implemented during the worst of the COVID-19 epidemic.

The EU-OPEC meeting on Monday afternoon was the latest in a series of discussions that began in 2005.

So far, penalties on Russian oil have been omitted by the EU. However, when the 27-nation group decided last week to impose Russian coal – the organization's first energy-related restriction – several top EU officials suggested oil may come next.

The European Commission is preparing ideas for an oil embargo against Russia, Ireland's, Lithuania's, and the Netherlands' foreign ministers announced Monday during an EU foreign ministers conference in Luxembourg, despite the fact that there was no consensus to restrict Russian petroleum.

Australia, Canada, and the United States, which are less dependent on Russian energy than Europe, have already prohibited the import of Russian oil.

EU member states are divided on whether to follow suit, given their increased reliance and the possibility for the move to drive up Europe's already high energy costs.

The EU plans to reduce its oil consumption by 30% by 2030, compared to 2015 levels, as part of its climate change objectives – yet an embargo would prompt a rush to replace Russian oil with other supplies in the near term.