March 4, 2024 [Reuters]- Russia will cut its oil output and exports by an additional 471,000 barrels per day (bpd) in the second quarter, in coordination with some OPEC+ participating countries, its Deputy Prime Minister Alexander Novak said on Sunday.
The world’s second-largest global oil exporter has been cutting crude oil and fuel exports by a combined 500,000 bpd in the first quarter, in addition to its previous pledge to curtail production alongside other members of the OPEC+ grouping.
Russia plans to gradually ease the export cuts, Novak said in a statement. In April, it will reduce output by an extra 350,000 bpd, with exports cut by 121,000 bpd. In May, the extra output cut will be 400,000 bpd and exports cut by 71,000 bpd. In June, all the additional cuts will be from oil output, he added.
Novak did not mention cuts in exports of fuel, production of which has suffered since the start of the year due to unplanned outages and drone attacks by Russia’s neighbour Ukraine.
A reduction in refining volumes means more Russian crude oil has become available, facilitating oil production cuts.
The export cut will be made from the average export levels of May and June 2023, Novak said.
Russia pledged in April 2023 to voluntary reduce its crude oil output by 500,000 bpd until the end of 2024 to around 9.5 million bpd. Novak late last month that Russian oil output stood at 9.5 million bpd.
It was not immediately clear what level Russia’s production quota will be after Sunday’s statement. However, output is set to drop to almost 9 million bpd in June, if the reduction is implemented as planned.
A six-month ban on Russian gasoline exports from March 1 was also not reflected in Novak’s statement.
Russian crude oil and fuel trade has been under Western sanctions over the Ukraine conflict, while the United States also last month imposed sanctions on Russia’s leading tanker group Sovcomflot.
An industry source said that Russia is being forced to reduce production by the new sanctions, adding: “There is no need to produce more than Russia can sell”.
A spokesperson for Novak did not immediately respond to a request for further detail on his statement.
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