OPEC Wants To Cancel Putin – He Is In Trouble!
(RepublicanNews.org) – Russia is facing mounting sanctions in the wake of its invasion of neighboring Ukraine. The European Union recently asserted that it would cut the amount of oil it imports from Russia by 90%, a blow to Russia’s economy. Now, the Organization of Petroleum Exporting Countries (OPEC) is looking at potentially kicking Russia to the curb.
— Daily Wire (@realDailyWire) June 1, 2022
A recent exclusive in The Wall Street Journal claims that OPEC members are considering suspending Russia from a longstanding production deal. Russia has for decades coordinated with OPEC’s output via the Declaration of Cooperation (DoC). The decision to potentially cut the country’s contributions entirely comes at a time when Russia’s economy is struggling under the weight of heavy international sanctions.
Such a shift could make it significantly easier for other regions, including the Persian Gulf, to make up for the gap by increasing production. In fact, the report suggests that at least 10 members of the organization and 13 of their partners are highly likely to agree to an overall output increase of around 432,000 barrels per day.
One OPEC delegate directly suggested that Russia would not likely remain a part of the DoC. James Coleman, a senior fellow at the American Enterprise Institute, told the Daily Wire that the decision to prune the foreign aggressor correlates with the organization’s history. OPEC has taken similar actions against various countries in the past.
Notably, Coleman does not consider OPEC pruning Russia from the deal hostile. Instead, he calls it “friendly,” explaining that the organization often caps the foreign country’s overall production. Yet, a total break would also effectively mean Russia is no longer beholden to OPEC rules, meaning it could produce as much crude as it desires.
Russia is the world’s third largest producer of oil. However, S&P Global believes the country will see its oil production drop around 10% in 2022. It isn’t yet clear just how severely that might impact the global market or whether heavy sanctions will finally exact their toll.
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