Russian Oil Embargo Presents Opec+ With Cloudy Outlook

2 Dec 2022 Issue: 65 / 48 By: Jamie Ingram

Expectations of additional cuts when Opec+ meets on 4 December have eased in recent days, especially since the meeting was shifted from in-person to virtual. Drastic action is not expected, with Opec+ holding out the prospect of adjusting policy in the new year if the looming Russia embargo creates shortages.

Opec+ ministers are essentially faced with two choices when they meet virtually on 4 December. To stick with current production allocations or cut again. Delegates insist that no decision will be made until the meeting itself, but the mood music is increasingly shifting towards holding firm amid swirling market uncertainty.

The meeting takes place just one day before the European embargo on seaborne Russian crude oil is due to come into force and uncertainty over the impact greatly complicates the decision-making process for Opec+. This embargo will also entail a ban on insurance and other critical services for seaborne exports of Russian crude oil, creating additional obstacles for the continued flow of cargoes to the likes of India and China (see p20 and MEES, 25 November). (CONTINUED - 804 WORDS)