{"id":456206,"date":"2022-06-01T21:27:00","date_gmt":"2022-06-01T18:27:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/commodities-corner-will-opec-fill-the-gap-as-russian-oil-output-falls-dont-count-on-it\/"},"modified":"2022-06-01T21:27:00","modified_gmt":"2022-06-01T18:27:00","slug":"commodities-corner-will-opec-fill-the-gap-as-russian-oil-output-falls-dont-count-on-it","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/commodities-corner-will-opec-fill-the-gap-as-russian-oil-output-falls-dont-count-on-it\/","title":{"rendered":"#Commodities Corner: Will OPEC+ fill the gap as Russian oil output falls? Don\u2019t count on it."},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a35d8d8ca61f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a35d8d8ca61f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/commodities-corner-will-opec-fill-the-gap-as-russian-oil-output-falls-dont-count-on-it\/#%E2%80%9CCommodities_Corner_Will_OPEC_fill_the_gap_as_Russian_oil_output_falls_Dont_count_on_it%E2%80%9D\" >&#8220;Commodities Corner: Will OPEC+ fill the gap as Russian oil output falls? Don\u2019t count on it.&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/commodities-corner-will-opec-fill-the-gap-as-russian-oil-output-falls-dont-count-on-it\/#Russian_output_is_set_to_drop_as_sanctions_aimed_at_energy_exports_take_hold\" >Russian output is set to drop as sanctions aimed at energy exports take hold<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/commodities-corner-will-opec-fill-the-gap-as-russian-oil-output-falls-dont-count-on-it\/#William_Watts\" >William Watts<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CCommodities_Corner_Will_OPEC_fill_the_gap_as_Russian_oil_output_falls_Dont_count_on_it%E2%80%9D\"><\/span>&#8220;Commodities Corner: Will OPEC+ fill the gap as Russian oil output falls? Don\u2019t count on it.&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Russian_output_is_set_to_drop_as_sanctions_aimed_at_energy_exports_take_hold\"><\/span>\n  Russian output is set to drop as sanctions aimed at energy exports take hold<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000916344\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000916344\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Talk of a potential deal that would let other OPEC+ producers make up the crude supply gap left by Russia has put a lid on oil prices, but it would take much more to bring them down, analysts said.<\/p>\n<p> \u201cExempting Russia from the OPEC+ output deal and allowing other producers such as Saudi Arabia to pump more might bring some temporary relief to the market, but the lack of sufficient spare capacity represents an increasingly binding constraint at a time of resurging postpandemic mobility,\u201d said Edoardo Campanella, a Milan-based economist at UniCredit Bank, in a Wednesday note.<\/p>\n<div class=\"paywall\">\n       OPEC+ \u2014 made up of the 13-member Organization of the Petroleum Exporting Countries and 10 other major producers, including Russia \u2014 is due to hold a regularly scheduled monthly meeting on Thursday. The Wall Street Journal <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/opec-weighs-suspending-russia-from-oil-production-deal-11654019943?mod=article_inline&amp;adobe_mc=MCMID%3D12892959562243355361014858089554751216%7CMCORGID%3DCB68E4BA55144CAA0A4C98A5%2540AdobeOrg%7CTS%3D1654085695&amp;mod=article_inline\" class=\"icon none\">reported Tuesday<\/a> that some OPEC members were exploring the idea of exempting Russia from production targets.<\/p>\n<p>OPEC+ agreed last year to bump up production in monthly increments, but Russian output is seen falling around 8% this year as a result of sanctions and embargoes by buyers in response to the late February invasion of Ukraine, where fighting continues to rage. The  Wall Street Journal article noted that there had been no formal push to exempt Russia and that it wasn\u2019t clear whether Moscow would go along with such a proposal.<\/p>\n<p>Oil futures pulled back from session highs to end mixed following the report on Tuesday. Crude futures were higher in Wednesday\u2019s session, with August Brent crude<br \/>\n        BRN00,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209704782\/delayed\" class=\"positive\">+0.74%<\/bg-quote><\/p>\n<p>        BRNQ22,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209705480\/delayed\" class=\"positive\">+0.74%<\/bg-quote><span>,<\/span><br \/>\n       the global benchmark, up 63 cents, or 0.6%, at $116.25 a barrel on ICE Futures Europe. West Texas Inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te crude for July delivery<br \/>\n        CL.1,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/211629951\/delayed\" class=\"positive\">+0.60%<\/bg-quote><\/p>\n<p>        CLN22,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209725365\/delayed\" class=\"positive\">+0.60%<\/bg-quote><span>,<\/span><br \/>\n       the U.S. benchmark, rose 55 cents, or 0.5%, to $115.22 a barrel on the New York Mercantile Exchange.<\/p>\n<p>U.S. stocks were nursing losses to begin June but traded well off session lows, with the Dow Jones Industrial Average<br \/>\n        DJIA,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598065\/realtime\" class=\"negative\">-0.21%<\/bg-quote><br \/>\n       down around 60 points, or 0.2%, while the S&amp;P 500<br \/>\n        SPX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210599714\/realtime\" class=\"negative\">-0.23%<\/bg-quote><br \/>\n       was off 0.2%.<\/p>\n<p>An exemption from production increases would reflect the reality that Russia is unlikely to be able to boost output due to sanctions targeting oil exports by the U.S., U.K., and, as of this week, European Union countries, said Robbie Fraser, manager of global research and analytics, at Schneider Electric, in a note.<\/p>\n<p>\u201cWhile Russian output has proven somewhat resilient so far, output is expected to drop in the coming weeks and months,\u201d he wrote. \u201cThat could move Russia into similar status as countries like Libya or Iran who have even been left out of coordinated production efforts due to a mix of political unrest and international sanctions.\u201d<\/p>\n<p>But OPEC+, which has been moving up production targets in monthly increments of 430,000 barrels a day, has continued to struggle to meet them. Analysts have blamed a lack of spare capacity across much of the region due to years of underinvestment.<\/p>\n<p>Saudi Arabia\u2019s oil minister, Prince Abdulaziz bin Salman, in May warned that the world \u201cis running out of energy capacity at all levels,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.yahoo.com\/now\/saudis-uae-world-serious-energy-160000804.html\" class=\"icon none\">according to news reports<\/a>.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Meanwhile, the oil market remains extremely tight, noted UniCredit\u2019s Campanella, a situation not helped by OPEC+\u2019s inability to meet its targets. That will only get worse as Russia\u2019s output falls (see chart below).<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:60.71428571428571%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-555439?width=540&amp;size=1.6473616473616473 540w, https:\/\/images.mktw.net\/im-555439?width=620&amp;size=1.6473616473616473 620w, https:\/\/images.mktw.net\/im-555439?width=639&amp;size=1.6473616473616473 639w, https:\/\/images.mktw.net\/im-555439?width=700&amp;size=1.6473616473616473 700w, https:\/\/images.mktw.net\/im-555439?width=700&amp;size=1.6473616473616473&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-555439?width=700&amp;size=1.6473616473616473&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-555439?width=700&amp;size=1.6473616473616473&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-555439?width=700&amp;height=425\" alt=\"\" title=\"\">\n      <\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n          <span class=\"wsj-article-credit article__inset__image__caption__credit\" itemprop=\"creator\"><br \/>\n            UniCredit Bank<br \/>\n          <\/span><br \/>\n  <\/figcaption><\/figure>\n<\/p><\/div>\n<p>       Factoring in output losses from Russia and assuming missing barrels from other OPEC+ countries remain unchanged would leave the cartel short of its goal by around 4.5 million barrels a day by July, he estimated. In other words, OPEC+ output would be the same as it was last August. In reality it will likely be lower, the economist said, because with the exception of Saudi Arabia, the United Arab Emirates and Iraq, all other OPEC+ producers have almost no spare capacity and would be unable to boost production as much as needed over the next two months.<\/p>\n<p>Campanella said a deal to exempt Russia from the agreement on Thursday would likely have a short-term, negative effect on crude prices, but would be unlikely to last. Only scr<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ing the OPEC+ quotas altogether and a renewal of Iran\u2019s nuclear accord would be sufficient to bring the market back into balance, he argued.<\/p>\n<p>The math works like this, Campanella said:<\/p>\n<blockquote><p>Overall, the spare capacity of OPEC+ (ex-Russia) is 4.2mb\/d. If it was fully released overnight (practically complicated), it would barely compensate for the missing barrels expected in July\u2026But, at that point, OPEC+ would no longer be able to add additional barrels as it will have exhausted its entire production capacity. Considering that global demand is expected to rise by 2.2mb\/d throughout 2H22 and non-OPEC+ production is expected to increase by around 1.3mb\/d, then the world would be short of 1mb\/d. Only a quickly signed Iranian nuclear deal could compensate for the shortfall and rebalance the market.<\/p><\/blockquote>\n<p>That reality, combined with the potential negative spillovers from the Russia-Ukraine war on the natural-gas market as winter approaches means the risk of Brent holding within the $115-to-$125-a-barrel trading range for a longer period has increased substantially, along with the potential for a spike to $130 a barrel, Campanella said.<\/p>\n<p><strong>Read:<\/strong> Why India is the big winner as EU\u2019s Russia oil ban redraws energy trade map<\/p>\n<\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"William Watts\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/william-watts\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/wlwatts\",\"text\":\"@wlwatts\"},{\"type\":\"link\",\"icon\":\"facebook\",\"url\":\"https:\/\/facebook.com\/williamwattsmarkets\",\"text\":\"williamwattsmarkets\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:bwatts@marketwatch.com\",\"text\":\"bwatts@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"William_Watts\"><\/span>William Watts<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"205_MW\" author-name=\"William Watts\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fwhy-oil-could-still-hit-130-a-barrel-even-if-opec-tries-to-make-up-lost-russia-production-11654104124%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7DFB-78D889B48469%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Commodities Corner: Will OPEC+ fill the gap as Russian oil output falls? Don\u2019t count on it.&#8221; Russian output is set to drop as sanctions aimed at energy exports take hold Talk of a potential deal that would let other OPEC+ producers make up the crude supply gap left by Russia has put a lid on&#8230;<\/p>\n","protected":false},"author":1,"featured_media":456207,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-555492\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-456206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/456206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=456206"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/456206\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/456207"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=456206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=456206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=456206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}