-G7 leaders work to ‘starve’ Russia of Oil money as Ukrainian President says he wants the war over by the end of the year
DM Monitoring
Madrid: French President Emmanuel Macron said on Monday the president of the United Arab Emirates, Sheikh Mohammed bin Zayed al-Nahyan (MbZ), had told him two top OPEC oil producers, Saudi Arabia and the United Arab Emirates, can barely increase oil production.
“I had a call with MbZ,” Macron was heard telling U.S. President Joe Biden on the sidelines of the G7 summit. “He told me two things. I’m at a maximum, maximum (production capacity). This is what he claims.” “And then he said (the) Saudis can increase by 150 (thousands barrels per day). Maybe a little bit more, but they don’t have huge capacities before six months’ time,” Macron said.
Brent oil prices jumped by over $2 per barrel to above $115 per barrel on the news amid tight global supplies and rising demand. Saudi Arabia and the UAE have been perceived as the only two countries in producer group the Organization of the Petroleum Exporting Countries and the world which still have some spare capacity and could help increase global deliveries. The West is seeking ways to reduce Russian oil imports to punish Moscow for the invasion of Ukraine. Saudi Arabia is currently producing 10.5 million bpd and has a nameplate capacity of 12.0 million-12.5 million bpd, which in theory shall allow it to raise production by 2 million.
The UAE is producing some 3 million bpd, has capacity of 3.4 million and has been working on raising it to 4 million bpd. The news – as presented by Macron – would be bullish for oil markets if both OPEC heavyweights can barely raise output. Europe is looking for ways to replace as much as 2 million bpd of Russian crude and some 2 million bpd of refined products it had been importing from Moscow before the Ukraine invasion. Meanwhile, Ukrainian President Volodymyr Zelensky told G7 leaders during a virtual meeting Monday that he wants the war in Ukraine to end by the end of 2022, according to a source familiar with his remarks, as leaders worked to starve Russia of its oil revenues and mitigate the economic fallout of the conflict.
The dual missions — sustain support for Ukraine while easing economic pressures at home — have defined this year’s summit of leading democracies, held high in the Bavarian Alps. While largely united, the leaders are all facing their own political imperatives to see a momentum shift in the fighting and bring an end to the conflict quickly.
To that end, leaders were nearing an agreement to try capping the price of Russian oil, depriving the country of revenues that have soared amid the global spike in energy prices. Details were still being ironed out, including whether the top buyers of Russian oil would agree to the limits, but US officials sounded confident in the prospects of the plan.
As the war in Ukraine grinds ahead, the question of how to end the conflict has loomed over the talks here. Zelensky’s timeframe, delivered via video conference during a morning session at the Schloss Elmau castle, was as clear a sign as he has given about where he sees the trajectory of the war headed.
A top adviser to President Joe Biden said Zelensky was focused on regaining momentum in Ukraine over the coming months — and not years — when he spoke to leaders.
“Zelensky was very much focused on trying to ensure that Ukraine is in as advantageous a position on the battlefield as possible in the next months as opposed to the next years, because he believes that a grinding conflict is not in the interest of the Ukrainian people,” US national security adviser Jake Sullivan said after the meeting.
