The leaders of the G7 nations yesterday urged OPEC to boost oil production amid fears of supply shortages following Russia’s invasion of Ukraine.
Following US President Joe Biden’s arrival in Europe, the group met on Thursday morning to discuss the conflict and the Western response to the war alongside NATO general secretary Jens Stoltenberg at its Brussels headquarters.
The G7 consists of the US, UK, France, Germany, Japan, Italy, and Canada.
In a statement, it pushed for OPEC to lead in raising oil supplies in tight global markets.
It said: “We call on oil and gas producing countries to act in a responsible manner and to increase deliveries to international markets, noting that OPEC has a key role to play. We will work with them and all partners to ensure stable and sustainable global energy supplies.”
Currently, OPEC and its allies including in Russia (OPEC+) are committed to raising oil production by 400,000 barrels per day – but many members have failed to hit their agreed monthly quotas with output levels falling well below the pledged increases this year.
Calls from the US and UK for leading OPEC nations such as Saudi Arabia and the UAE have fallen on deaf ears with oil producing nations fearing market volatility and future supply gluts.
They also do not wish to antagonise Russia – with most OPEC members opting for a neutral stance on the invasion and not imposing sanctions on the country in line with the West.
By contrast European G7 nations, alongside the EU, have consistently outlined their support for Ukraine.
However, they have not joined the UK and US in restricting Russian oil imports – with member states split on the prospect of energy sanctions.
Reflecting this impasse, the G7 outlined that it is looking to take “further steps” to reduce Western reliance on Russian energy but that it needed to “ensure secure alternative and sustainable supplies.”
Germany is particularly concerned about sanctions on Russian fossil fuels – with the country reliant on Russia for a third of its oil and over half its natural gas imports.
At a European council meeting later in the day, the divisions were laid bare with Poland and the Baltic states calling for restrictions on oil imports while Germany and Belgium dissented.
Whether OPEC heeds the call to boost oil production is highly questionable, as OPEC sources have told news agency Reuters the organisation is concerned about the effect of potential EU oil import bans on consumers.
OPEC’s sustained underperformance helped drive prices to 14-year highs earlier this month – with Brent Crude soaring to $139 per barrel – exacerbating the cost of living crisis.
However, EU Energy Commissioner Kadri Simson revealed on Twitter she had met with OPEC officials including Secretary General Mohammad Barkindo last week, to discuss the “extraordinary times” for the energy market.