The Organisation of the Petroleum Exporting Countries says the ongoing war between Russia and Ukraine had serious ramifications for the global energy industry.

Mohammad Barkindo, OPEC secretary-general, said this during the 15th high-level meeting of the European Union-OPEC energy dialogue on Monday in Vienna, Austria.

A copy of Mr Barkindo’s speech was obtained, saying that the war in Ukraine could have significant consequences on many fronts, including geopolitics, the global economy and even the world order itself.

“Both Ukraine and the Russian Federation are key exporters of commodities and essential agricultural goods.

“We could potentially see the loss of more than seven million barrels per day (mb/d) of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions,’’ he said.

Mr Barkindo said the last major oil supply disruption of this magnitude was in 1978 and 1979, when 5.6 millions of mb/d were taken off the market.

He said at that time, spare capacity levels were at nine mb/d, nearly three times OPEC-10’s current levels, amounting to 3.3 mb/d.

Mr Barkindo said other gross peak supply losses during the last 60 years were within the range of 1.5 to 4.3 mb/d.

“Therefore, considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude.

“These crises have compounded to create a highly volatile market. I must point out, however, that these are non-fundamental factors that are out of our control,’’ he said.

On what needs to be done to mitigate the situation, he called for continued collaboration with non-OPEC partners to help support market stability and economic growth through joint decisions.

“I am confident we will persevere once more with the current challenges we are facing.”

He, therefore, urged global leaders to follow this example of multilateralism and once again ensure an unhindered, stable and secure flow of energy to the whole world.

“OPEC and our non-OPEC partners will continue to remain vigilant in monitoring the daily movements of the oil market, and will continue to meet each month to discuss the latest developments and act where necessary.’’ 

(NAN)