OPEC increases production by 50%, and the EU embargo has twists and turns

May 29, 2024, 11:58 AM

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The EU and OPEC made headlines with new sanctions against Russia and a surprise increase in oil output. Discover the latest developments.

Last night, the EU and OPEC released heavy news one after another!

According to CCTV news, on June 2, local time, according to EU sources, the 27 member states of the EU officially approved the sixth round of sanctions against Russia after a one-day delay due to Hungaryâ€™s opposition. The relevant sanctions are expected to come into effect the next day.

It is understood that the sanctions will be implemented in stages, including a six-month ban on the import of Russian crude oil shipped to EU member states by sea, and a ban on the import of Russian refined oil for eight months. Pipeline crude will be temporarily exempted as a concession to Hungary and other landlocked countries. The sanctions package also includes the removal of Sberbank, Moscow Credit Bank and Russian Agricultural Bank from SWIFT (Bank Settlement System).

Previously, the EU has repeatedly swayed on the latest sanctions plan: on the evening of May 30, local time, European Council President Michel said on social media that the EU has reached a consensus on imposing an oil embargo on Russia, "will immediately cover three points 2. Oil imports by the EU from Russia". On June 1, the EU released another message saying that the sixth round of EU sanctions against Russia, which was originally planned to be officially approved on the same day, could not be passed as scheduled due to Hungaryâ€™s opposition.

On June 2, local time, the White House announced new sanctions against Russia. In a statement, the White House said the new round of sanctions was a further step in the U.S. The new U.S. Treasury Department sanctions will target key Russian government and business officials. The U.S. State Department has also increased sanctions on a number of wealthy Russian businessmen with close ties to Russian President Vladimir Putin.

In addition, the U.S. Department of Commerce has imposed further restrictions on the technology and other materials Russia needs. The U.S. government decided to add 71 parties from Russia and Belarus to the Entity List, denying them access to products made using U.S. technology or software.

Last night, according to the Wall Street Journal, OPEC and its allies agreed on Thursday to increase output by 648,000 barrels per day in July and August, exceeding market expectations, meaning that OPEC+ will expand its oil supply increase by about 50%. Some market participants believe that the move will mark a major shift in Saudi Arabia. Saudi Arabia has previously resisted demands from the United States, Britain and other Western countries to increase oil production to help reduce a surge in oil prices caused by the conflict between Russia and Ukraine. Senior U.S. officials traveled to Saudi Arabia in recent weeks to broker a deal following a series of diplomatic moves by Washington and Riyadh, the officials said.

Before the OPEC+ meeting, Brent oil and U.S. oil once fell more than 3%. After the release of the latest OPEC+ resolution, Brent oil and U.S. oil continued to rise in intraday trading, and both turned up. As of the close, WTI July crude oil futures closed up 1.40%, and Brent August crude oil futures closed up 1.14%.

The prospect of the Fed raising interest rates has strengthened, and the offshore yuan has risen by more than 600 points throughout the week

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