Russia’s previously announced decision to cut oil production by 500,000 barrels per day (bpd) in response to EU sanctions will only apply to output in March, Deputy Prime Minister Alexander Novak told reporters on February 21, noting that the policy’s extension would depend on the situation.
Moscow declared in mid-February it would remove the equivalent of 5% of its national oil output from the market next month, stating it would not sell oil to buyers who directly or indirectly adhered to the price caps imposed on Russian crude and petroleum products.
Other members of the OPEC+ oil suppliers’ cartel were not consulted on the matter, Novak had said earlier.
“We will see how the market situation will unfold, and depending on this, decisions will be taken on the market,” the minister said, adding that “the present decision has only been made for March.”
Companies will make cuts that are proportionate to their overall production, according to Novak, and will affect only crude oil and not condensate supply.
Under Russia’s commitments under OPEC+’s current production deal, Russia can produce up to 10.48mn bpd of oil next month. It has been producing less than its quotas in recent months as a result of fallout from Western sanctions, however, with production averaged only 9.8-9.9mn bpd in January.
Meanwhile, OPEC+’s de-facto head, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman Al-Saud, said last week that it would stick with the quotas that were agreed in October. He cited concern about the outlook for Chinese demand as a reason not to release more barrels onto the market.
“The Chinese economy’s unlocking and because of that you will have demand and what have you, but we all went through the cycles of openings and lockdowns and therefore what assurances [would we have] and the world have that none of what we went through, all of us, every country, will not be repeated?,” he said in an interview with Energy Aspects.
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