The Organisation of the Petroleum Exporting Countries (OPEC) has asserted that Russia’s invasion of Ukraine causes massive volatility in the global energy market.

Mohammad Barkindo, OPEC secretary-general, made the assertion while speaking at Wednesday’s virtual 62nd Meeting of the Joint Technical Committee (JTC).

“The crises we face are causing huge volatility, with daily price swings of more than $5 per barrel occurring on 13 occasions across March and April,” Mr Barkindo said.

He pointed out the implications and possible far-reaching consequences of the ongoing conflict, adding that they compounded the uncertainties related to the COVID-19 pandemic.

“It has heralded in further economic volatility, elevated risk premiums for oil, as well as many other essential commodities, given that both the Russian Federation and Ukraine are key global exporters, including of essential agricultural goods. 

“From the oil market perspective, however, what is clear is that Russia’s oil and other liquids exports of more than seven million barrels per day cannot be made up from elsewhere. The spare capacity just does not exist.”

He stressed that its potential loss, through either sanctions or voluntary actions, is rippling through energy markets.

Mr Barkindo also recalled that April 2020 was the darkest and most sudden downturn in the history of the oil industry due to the COVID-19 pandemic.

“However, the uncontrolled chaos over the month was also met by a landmark decision from OPEC and non-OPEC countries in the Declaration of Cooperation (DoC) on April 12,” Mr Barkindo said.

He said the move was crucial for rescuing the industry from the precipice on which it stood and assisting with the resuscitation of the global economy.

Mr Barkindo said that recent events and developments imply policymakers’ continuing shift to understand better what was required in the energy transition.

(NAN)