- Major oil producers fear surging prices will speed up the transition to EVs, Iraq’s oil minister told the NYT.
- Oil prices have been surging, with Brent crude futures steadying above $100 on Friday.
- Volatility remains high after Russia’s invasion of Ukraine, over which the US and UK have banned Russian oil, gas, and coal imports.
As the price of oil surges, some of its biggest producers are worried consumers will turn to electric vehicles instead.
Iraq’s oil minister, Ihsan Abdul Jabbar, told The New York Times on Wednesday that the OPEC member and other oil producers in the Middle East are concerned about this possibility.
“We are happy in the short term, but not happy if this lasts,” Abdul Jabbar said.
Oil prices have been climbing following Russia’s invasion of Ukraine, with Brent crude futures up 3.8% at $113.50 a barrel Friday morning. Brent saw price swings of 30% this week, which was its most volatile in two years.
President Joe Biden banned imports of Russian oil, liquefied natural gas, and coal this week, targeting an area left out of the US’ first round of retaliatory sanctions.
The US imported 8.5 million barrels per day of crude and refined products like gasoline and heating oil in 2021, according to the Energy Information Administration. Of these, roughly 672,000 barrels, or about 8%, were from Russia.
The ban could drive gas prices to new heights and widen the gap that already exists between supply and demand.
Russia is the world’s third-largest oil producer and has the world’s biggest reserves of natural gas. The secretary general of OPEC said this week that there’s “no capacity in the world” that could replace the 7 million barrels of oil Russia produces per day.