OPEC+ Maintains Output Targets Ahead Of Western Sanctions On Russian Crude

OPEC+ Maintains Output Targets Ahead Of Western Sanctions On Russian Crude

Dec. 5, 2022, 7:27 a.m.

Major oil producing nations have decided to keep their output targets unchanged amid concerns over a global economic downturn and Western sanctions on Russian crude exports.

The Organization of the Petroleum Exporting Countries and its allies, such as Russia, held an online meeting on Sunday.

The OPEC+ group decided to maintain their agreement to cut oil production by 2 million barrels a day from November, to support crude prices.

Crude oil prices have been on the decline, due partly to rapid interest rate hikes by central banks in Europe and the United States to stifle inflation.

China's economy has also been losing steam because of rigid "zero-COVID" policy restrictions on the movement of people.

Western countries announced they are enforcing sanctions against seaborne shipments of Russian crude, due to the country's invasion of Ukraine.

The European Union, G7 nations and Australia are capping their price for Russian crude at 60 dollars a barrel from Monday. The EU will also ban imports by sea, in principle, from the same day.

Starting in February, the EU will also place an embargo on petroleum products from Russia. Last year, it imported crude oil and petroleum products worth 71 billion euros, or roughly 75 billion dollars. The EU says the sanctions will slash imports from Russia by about 90 percent.

Russian Deputy Prime Minister Alexander Novak indicated on Sunday that his country's position is unchanged, and it would not export crude oil to countries that set price caps.

Analysts say OPEC+ decided to stick to its output targets to monitor how the punitive measures will affect crude demand and prices.

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