Crude oil futures fell on Thursday on media reports that Organisation of the Petroleum Exporting Countries (OPEC) could start to pump more crude to make up for a drop in Russian production caused by Western sanctions.
As of 1735 hours GMT, the price of Brent, the international benchmark for two-thirds of the world’s oil, dipped by $1.04 (-0.89 percent) to $115.25. The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $1.16 a barrel (-1.01 percent) to $114.10. Brent crude, the global benchmark for oil, hit $125 a barrel on Tuesday, its highest level since early March. The WTI oil almost reached $120 per barrel. Both have sincem dropped back in response to the media reports.
The price for Opec Basket decreased from $122.94 to $117.05, showing an increase of $5.89 (-4.79 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro,
Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
The price of Russian Sokol dipped to $100.23 a barrel with a 1.92 percent decrease and Arab Light prices witnessed a decrease of 2 percent to reach $111.01 a barrel.
The Wall Street Journal reported on Tuesday that some members of the oil exporters’ cartel are exploring the idea of suspending the OPEC+ supply agreement with Russia. This would allow countries such as Saudi Arabia and the United Arab Emirates to step in and ease a supply crunch that pushed global crude prices above $120 a barrel this week.
Saudi Arabia, OPEC’s de-facto leader, has indicated to Western allies that it is prepared to raise its oil production if Russian output falls substantially as a consequence of the sanctions imposed over the invasion of Ukraine in February, the Financial Times reported. An agreement could come as early as Thursday at a meeting of OPEC and Russian energy ministers.
Saudi Arabia previously dismissed US requests to increase production beyond a long-standing quota agreed with Russia and other non-OPEC producers. But concerns that sky-high prices could tip the world into recession appear to be prompting a rethink. The OPEC+ meeting later Thursday could be a pivotal one if Russia is given an exemption from its production quotas, which would allow the two main swing producers, Saudi Arabia, and the UAE, to ramp up exports to fill the gap.