Alexander Dyukov, CEO of the Russian “Gazprom Neft” company, said on Tuesday that the reduction in Russian production by 500 thousand barrels per day, starting in March, aims to achieve balance in the oil market in the face of a surplus in global supplies.
Dyukov was also quoted by the Interfax news agency as saying he expected the oil price to be in the range of $80 to $110 per barrel in 2023.
Russia intends to reduce its oil exports from its western ports, according to what sources told Archyde.com, last Thursday, by up to 25 percent during next March, to exceed the levels of production cuts announced previously, in an attempt by Moscow to increase the prices of its oil products and its derivatives.
Russia had announced earlier its intention to reduce its oil production by 500 thousand barrels per day during the month of March, which represents 5 percent of its production, or regarding 0.5 percent of global production.
Russian officials said the announced cuts would last for one month, starting in March, in response to Russia’s cap on the price of Russian oil and its products imposed by Western countries.
The G-7 countries had previously adopted a maximum price for Russian oil transported by sea at $60 a barrel, and set a maximum price for Russian diesel at $100 a barrel.
According to the Archyde.com report, Russia was able to redirect most of its oil exports from European markets to India, China and Turkey, which benefited from the low prices of Russian oil and ignored Western sanctions.
However, Russia is still seeking to redirect its exports of refined oil products to other markets, following oil refiners from China, India and Turkey flooded the markets with their products.
On the other hand, US officials said that Russia’s announcement of production cuts in March indicates its inability to sell its oil products.
