Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Exclusive-Russia orders companies to cut oil output to meet OPEC+ target

Published 25/03/2024, 14:57
© Reuters. FILE PHOTO: An employee inspects a well head in the Yarakta Oil Field, owned by Irkutsk Oil Company (INK), in Irkutsk Region, Russia March 10, 2019. Picture taken March 10, 2019. REUTERS/Vasily Fedosenko/File Photo
CL
-

MOSCOW (Reuters) - Russia's government has ordered companies to reduce oil output in the second quarter to ensure they meet a production target of 9 million barrels per day (bpd) by the end of June in line with its pledges to OPEC+, three industry sources said on Monday.

Earlier this month, Russian Deputy Prime Minister Alexander Novak said that Russia would cut its oil output and exports by an additional 471,000 barrels per day (bpd) in the second quarter, in coordination with some members of the Organization of the Petroleum Countries and allied producers (OPEC+).

Russia plans to gradually ease the export cuts and focus on only reducing output. Novak has not provided the targeted level for output, but production would drop to almost 9 million bpd in June if the reduction is implemented as planned.

The sources, who declined to be named because they were not authorised to speak publicly, said the government had given specific targets to each company, indicating its intention to meet its OPEC+ pledge to cut output to support international oil prices.

Russia's Energy ministry declined to comment. Alexander Novak's press office did not reply to Reuters' request for comment.

Reuters sources said the production cuts would facilitate a seasonal peak in maintenance at refineries, many of which had already reduced fuel production as a result of outages and Ukrainian drone attacks.

Novak late last month said Russian oil output was 9.5 million bpd.

Russian oil and gas condensate production have declined from an annual peak of 11.7 million bpd in 2019 to around 10.8 million in recent months as a result of coordinated actions with OPEC.

Russia decided not to disclose statistics on crude oil production as it treated large amounts of data as classified following the start of what it calls a special military operation in Ukraine in February 2022.

Russian oil production in April, May and June is set to fall by around 3.6%, 4.1% and 4.9% respectively from March, in line with Russia's promises to voluntary reduce production, the data provided by sources and Reuters calculations showed.

© Reuters. FILE PHOTO: An employee inspects a well head in the Yarakta Oil Field, owned by Irkutsk Oil Company (INK), in Irkutsk Region, Russia March 10, 2019. Picture taken March 10, 2019. REUTERS/Vasily Fedosenko/File Photo

Novak has said Russia will reduce output by an extra 350,000 bpd in April, with exports will be cut from March levels by 121,000 bpd. In May, output will be cut by 400,000 bpd and exports by another 71,000 bpd. In June, all the additional cuts will be from oil output.

That does not include production of gas condensate, a type of very light oil, which in 2023 was around 1.3 million bpd.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.