Replacing Russian oil a difficult task for EU, warns Opec

The European Union (EU) may not find enough oil elsewhere to replace Russian crude oil lost by a possible ban, Mohammad Barkindo, OPEC secretary general of the Organisation of Petroleum Exporting Countries (Opec) has said.

While the EU choose to ban imports of Russian crude oil in response to Russian President Vladimir Putin's invasion of Ukraine, global oil supply situation did not warrant such an action, Barkindo was quoted as saying in a speech at a high-level meeting between OPEC and the EU.

"We could potentially see the loss of more than 7 million barrels per day (bpd) of Russian oil and other liquid exports, resulting from current and future sanctions or other voluntary actions. Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude," the secretary general said.

The EU was hoping to tap into Opec, wanted the cartel to increase crude oil output in line with the increase in demand. However, Opec feels that it cannot alter supplies on grounds other than market issues and has decided to stick to its agreed-upon oil production hikes of just 400,000 bpd.

The Russia-Ukraine war is a geopolitical and issue and is not fundamental—and therefore beyond Opec's control, according to the organisation.

The EU has not yet banned imports of Russian oil and gas, but new humanitarian rights issues have triggered an increased fervor in replacing potentially banned Russian barrels in an effort to choke off Russia's income stream.

Russia's crude oil shipments rebounded in the first week of April to the highest level so far this year, with Russia's Q1 trade surplus hitting record levels as the prices of oil and gas continue to be elevated. While it has been noted that large Asian buyers such as India and China continue to import oil and gas from Russia, so does the EU.

Russia expects to earn $9.6 billion more in April from oil and gas than in March.