OPEC is ready to raise production by rolling back its oil output cuts further if required to address market shortfalls after the United States imposed new sanctions on Russian oil majors, Kuwait’s oil minister said on Thursday.
In a sharp policy shift, U.S. President Donald Trump targeted Russia’s largest oil companies, Lukoil (LKOH.MM) and Rosneft (ROSN.MM), in Washington’s toughest measures on Russian business since Moscow’s invasion of Ukraine.
Global oil prices rose by 5% on Thursday following the news that also prompted India to consider cutting Russian imports.
“I expect that any decision to impose sanctions will certainly have a positive impact on prices,” Kuwaiti Minister Tariq Al-Roumi said in response to a Reuters question.
Al-Roumi added that he expects a shift in demand towards the Gulf and the Middle East as a result of the sanctions. “We are seeing signs now,” he said.
Kuwait is among seven OPEC+ member countries that have been gradually increasing oil output after years of cuts to support the market under an agreement by the group comprising the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers.
The group, which pumps about half of the world’s oil, has reversed course this year to regain market share, and as Trump demanded OPEC pump more to help keep a lid on gasoline prices.
It increased its oil output targets by more than 2.7 million bpd this year, equating to about 2.5% of global demand.
At its October 5 meeting, OPEC+ said it will raise oil output from November by 137,000 barrels per day (bpd).
(Reporting by Ahmed Hagagy, Writing by Nayera Abdallah; Editing by Emelia Sithole-Matarise)