Russian Oil Production Disruption Expected to Create Global Supply Shock – The International Energy Agency warned this week that a dramatic reduction in Russian oil supply could create a “global oil supply shock.”
According to the agency, from April, oil production in Russia could drop by around 3 million barrels per day, which constitutes around 3% of global supply.
In its monthly report, the IEA also said that the implications of an oil supply reduction of this size “cannot be understated.”
No Clear Plan On How to Replace Russian Oil
President Joe Biden has pitched several alternatives to importing Russian oil, but there remains no clear plan on how the United States will access the oil the market needs. The only two producers that have the additional capacity to make up for the shortfall are the United Arab Emirates and Saudi Arabia – both of whom have rejected requests from the Biden administration to increase production over the last year.
Both members of the OPEC+ coalition, which includes Russia, the country’s must meet their own obligations to the cartel. The UAE ambassador to the United States recently suggested that the country is willing to pump more oil, but other officials have said that the UAE is committed to its OPEC+ agreement first.
There has been no movement from Saudi Arabia on increasing production, with the country previously restating its plans to only modestly increase production in the coming years.
British Prime Minister Joins Biden in Pressuring Saudi Arabia
British Prime Minister Boris Johnson arrived in the United Arab Emirates on Wednesday to initiate talks on increasing the oil supply. He is expected to travel to Saudi Arabia to engage in similar discussions.
Johnson’s meetings with Crown Prince Sheikh Mohammed bin Zayed in Abu Dhabi and Crown Prince Mohammed bin Salman in Riyadh were organized with the goal of offsetting the loss of Russian oil. In a statement, the British Prime minister admitted as much.
“The brutal and unprovoked assault President Putin has unleashed on Ukraine will have far-reaching consequences for the world, well beyond Europe’s borders,” Johnson said.
“The UK is building an international coalition to deal with the new reality we face. The world must wean itself off Russian hydrocarbons and starve Putin’s addiction to oil and gas,” he said.
Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.
