Vienna: The Organization of the Petroleum Exporting Countries (OPEC), the leading organisation of oil-producing nations, along with other countries that produce oil, is recognised as the OPEC Plus. The bloc has announced a reduction in crude oil production. This announcement comes when the European fuel supply crisis is intensifying, thereby drawing much attention to it. Analysts say that this new decision of OPEC Plus is a part of a political stance and an attempt to send a message to the West. Meanwhile, Russia has issued a stern warning that it will not streamline fuel supply to Europe unless the Western countries lift sanctions.
Considering the background of the Russia-Ukraine war, Russia has reduced its energy supply. Russia has also warned that it will stop exporting crude oil and natural gas if the West imposes sanctions on it or tries to control the prices. If Russia actualises this warning, it will cause a major upheaval in the energy market, and crude oil prices may surge between $200 to $300 per barrel. Therefore, western countries appealed to OPEC to increase the supply of energy. Accordingly, OPEC Plus increased the supply by 700,000 barrels in the last three months.
However, OPEC Plus has now changed its stance and decided to cut production by 100,000 barrels from next month. It has cited the uncertainty in the international market and the increase in oil production after the Iran deal as the reasons for taking the decision. Although the decline is nominal compared to the growth made so far, its impact is beginning to be felt in the international market. Within hours of the OPEC Plus announcement, crude oil prices reported a rise of 3%, reaching $95 per barrel. Analysts have indicated that these rates may again cross the $100 per barrel mark in the coming days.
The United States, European, and other Western countries have imposed massive sanctions on the Russian oil sector. The European countries have also announced ambitious plans to stop oil and gas imports from Russia in the next few years. Nevertheless, despite the European countries announcing such plans for the future, they have not been able to find a solution to the issues of energy supply and its rising rates in the current scenario. They are forced to plead with the Middle Eastern and African countries for this.
Meanwhile, Kremlin spokesman Dmitry Peskov has warned that the energy supply to Europe will not be smooth unless Western sanctions are lifted. Russia has stopped gas supply through the Nord Seam 1 pipeline citing a technical fault. Due to this, the price of natural gas in European countries has increased by 30%, creating great unrest. Moreover, Russia has blamed the sanctions and European policies for halting the energy supply.
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