OPEC Secretary-General Haitham al-Ghais said March 7 that Russian oil has found "new homes" and that the group's wider alliance with the Kremlin and nine other producers was crucial for market stability.
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"It's critical and important to have OPEC+," Ghais told delegates attending the CERAWeek by S&P Global conference in Houston, adding that without the broader alliance, there would be more market "instability, more volatility, and that's something not in the interest of consumers."
Russia's invasion of Ukraine has triggered sweeping change in global oil markets after the US and its allies imposed sanctions on Russian crude and oil products along with a price cap. In response, Russia has redirected volumes of its main Urals crude grade and products into Asian markets, traditionally key markets for OPEC's core Gulf producers such as Saudi Arabia.
"Russian production has been resilient, and it has managed to find new homes," he said. "It is not just China and India, I think it is also Turkey."
Russia taking a much bigger market share in India in 2022 has dragged down OPEC's share to the lowest in more than a decade. OPEC saw its share of India's crude imports shrink to 64.5% in 2022, from a peak of 87% in 2008.
Urals DAP West Coast India was last assessed by Platts, part of S&P Global Commodity Insights, at $65.74/b March 7, over $18 below Dated Brent.
The top OPEC official played down any concerns that the group was worried by the shifting flows in Russia's crude trade toward Asia.
"It's not something that really concerns us," Ghais said. "The market has always seen redirection of flows."
Before the Russia-Ukraine war, Europe sourced almost 30% of its crude and products from Russia. However, a year on and the EU's embargo on Russian crude and products has reduced imports to a trickle from 3.3 million b/d in February 2022 before the Kremlin's tanks rolled across the border.