Analysts said Tuesday that while there are alternatives to Russian oil, they will be insufficient or logistically difficult if the United States and its allies ban Russian energy imports.
“There’s no way that even OPEC+ and even Iran and Venezuela combined can make up for it,” Vandana Hari, founder of energy intelligence firm Vanda Insights, told CNBC’s Squawk Boxes Asia.
Russia’s war in Ukraine shows no sign of abating like US and allies weigh in on banning Russian oil and natural gas imports. oil prices It has risen to unprecedented levels since 2008, although these gains were subsequently pared back. There was also concern that Russia might respond by cutting off natural gas supplies to Europe.
Harry said that it is certain that some of the Russian capabilities could be replaced.
Russia It exports about 5 million barrels of crude oil per dayAccording to the International Energy Agency. Harry said about two million people could be replaced by that amount if OPEC members Saudi Arabia, Iraq, Kuwait and the United Arab Emirates “can increase their capacities at the same time to their full potential.”
However, Harry said much of the spare capacity within OPEC and its allies, known as OPEC+, is also Russian.
The problem, she said, is that OPEC+ will have to “re-open” its production quota system “and it doesn’t seem inclined to do anything like that yet.” Any production cuts or increases in OPEC+ countries are measured on a baseline basis – the higher this number, the more oil a country is allowed to pump.
Regina Mayor, KPMG’s US energy and natural resource leader, added that OPEC+ is “incredibly disciplined on how to bring crude oil back into the market.”
“There are other sources of oil supplies,” she told CNBC on Tuesday. “It’s really questionable about how quickly they can start online, and the logistics of getting them to where they really need them.”
Elsewhere, the US is also reported to be in talks with Venezuela to lift sanctions on its oil, as they are sources of alternatives to Russia.
But even if those sanctions were lifted, Harry said it would only free another 100,000 barrels per day from Venezuela — “certainly nothing that could even come close to making up for the Russian supply disruption.”
Russia The third largest oil producer in the world After the United States and Saudi Arabia. It’s also a file The largest exporter of crude oil to world markets And the largest supplier of natural gas to the European Union, about 43%.
Last week, Europe’s head of energy told CNBC The European Union has a contingency plan In the event that Russia cut off gas supplies from the bloc. The European Union has repeatedly spoken of the need to diversify its suppliers, but this has not materialized. Now, amid a war in Ukraine on its eastern flank, the European Commission, the EU’s executive arm, has said it wants to end once and for all this dependence on Russia.
CNBC’s Silvia Amaro contributed to this report.