2024-03-04 00:00:42
By PortalPortuario Editorial Staff/Reuters Agency
@PortalPortuario
Russia will reduce its oil production and exports by an additional 471,000 barrels per day (bpd) in the second quarter, in coordination with some participating countries of the OPEC+as announced by the Deputy Prime Minister Alexander Novak.
The world’s second-largest oil exporter has been cutting crude oil and fuel shipments by a combined 500,000 bpd in the first quarter, in addition to its earlier pledge to lower output along with other members of the OPEC+ group.
Russia plans to gradually ease export cuts, Novak said in a statement. In April, it will reduce production by an additional 350,000 bpd, and movements to foreign markets will contract by 121,000 bpd.
In May, the additional production reduction will be 400,000 bpd and exports will decrease by 71,000 bpd. In June, all additional cuts will come from oil production, the Russian official added.
Novak did not mention cuts to fuel shipments, production of which has been hit since the beginning of the year due to unplanned outages and drone attacks by Russia’s neighbor Ukraine.
A reduction in refining volumes means more Russian crude oil is available, making it easier to cut oil production. The decrease in exports will be carried out based on the average export levels of May and June 2023, Novak said.
Russia committed in April 2023 to voluntarily reduce its crude oil production by 500,000 bpd until the end of 2024, to regarding 9.5 million bpd. Novak late last month that Russian oil production stood at 9.5 million bpd.
It was not immediately clear what the level of Russia’s production quota will be following the statement on Sunday, March 3. However, production is expected to fall to almost 9 million bpd in June, if the reduction is implemented as planned.
The six-month ban on Russian gasoline exports starting March 1 was also not reflected in Novak’s statement.
Russia’s crude oil and fuel trade has been under Western sanctions over the Ukraine conflict, while the United States also imposed sanctions on the main Russian tanker group, Sovcomflot, last month.
An industry source said Russia is being forced to reduce production because of the new sanctions, adding that “there is no need to produce more than Russia can sell.”
A spokesman for Novak did not immediately respond to a request for more details regarding his statement.
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