US says Russian oil price cap won’t target OPEC
New moves by Group of Seven nations to cap Russian oil sales at a low imposed price will not be replicated against OPEC producers, whose plans to cut production have angered consuming nations, it said. a US Treasury official told Reuters.
Washington communicated to representatives of the Organization of the Petroleum Exporting Countries (OPEC) to reassure them of the limits of its plans and maintained from the start that the cap would not target other oil producers, the official added.
The comments could help ease a spat between the United States and Saudi Arabia, the top oil exporter and de facto leader of OPEC, over what Washington sees as collaborating with Russia to starve markets of oil. supply just as a global recession looms.
Tensions have simmered between consumer nations, such as the United States, and oil producers over output policy, with sources telling Reuters that OPEC’s anger over the price cap plan was one of the reasons for its decision to cut production.
OPEC+, which groups the producing bloc with allies including Russia, announced last week that it would cut production by 2 million barrels a day to balance markets and ease volatility.
Saudi Arabia said the actual reduction would likely be around 1 million barrels per day (bpd) as several OPEC members struggled to meet their existing production targets.
The White House said U.S. analysis showed the cut could have waited until the next OPEC meeting, after the U.S. midterm elections in November.
But OPEC officials did not link the move to the Russian oil price cap in their talks with the United States, US Deputy Treasury Secretary Wally Adeyemo said last week.
The United States said last week that the cut would boost Russia’s revenue and suggested it was politically engineered by Saudi Arabia, which denied on Sunday that it was backing Moscow in its invasion of Ukraine.
The price cap due for December 5 was designed specifically to deal with Russia’s invasion of Ukraine and will not be carried over to other producers, the official added, as their measures to curb production drive up prices.
Nor do the new sanctions signal the start of a buying cartel to counter the impact of OPEC policies on the oil market, said the official, who spoke on condition of anonymity due to the sensitivity of the oil market. the situation.
The Paris-based International Energy Agency’s Consumer Countries Group said last week that the OPEC+ cut had pushed up prices and could push the global economy into recession.
But the US treasury official said the cut’s impact on prices was moderate, saying it might take a $30-$40 price spike or a cut in production 10 times the cut. actual OPEC+ production of around 900,000 bpd to trigger a recession.
The G7 is keen to starve Moscow of wartime revenue but seeks to avoid a global supply shock, which could drive up prices and hurt its own citizens as fears of a global recession deepen.
Adopted by G7 countries in September, the price cap plan has come up against much stricter European Union bans on Russian shipments ratified in June.
The EU agreed to the cap this month, but regulatory details have not been ironed out, heightening anxiety about the plan in the oil industry with six weeks to go.