Moscow has reduced its crude output in retaliation to Western sanctions
Russia slashed its oil output in March by 40% more than previously announced, Bloomberg has reported, citing a source familiar with Energy Ministry data. The decline was the equivalent of around 700,000 barrels per day (bpd), the outlet stated.
In February, Russia pledged to voluntarily reduce oil production by 500,000 bpd, starting from March. The move was part of retaliations to sanctions, and saw sales halted to buyers that comply with a Western-imposed price ceiling of $60 per barrel on Russian oil. However, the actual reduction turned out to 40% higher, Bloomberg reported, citing ministry data.
When announcing the crude output cut, Russian Deputy Prime Minister Aleksandr Novak said it would be based on February production volumes, which Bloomberg estimated at 10.1 million bpd.
Figures revealed to the outlet by an anonymous source showed a daily average of 1.285 million tons of crude pumped last month, or the equivalent of around 9.4 million barrels. This indicates a production cut of nearly 700,000 bpd, the outlet calculated.
Production of crude oil and condensate totaled 1.413 million tons in March, which is equivalent to 10.36 million bpd, compared to 11.1 million barrels in February, according to Bloomberg calculations. The figures correspond to cuts of about 740,000 bpd, the outlet said.
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Russia has repeatedly warned of potential output cuts since the EU and G7 began discussing a cap on the price of Russian exports. Moscow has called the measure “an intervention in market relations and an extension of destructive energy policies” by the West.
Earlier this month, eight members of the OPEC+ group, including major oil producers such as Russia, Saudi Arabia, Iraq, and Kuwait, pledged a total of 1.66 million bpd of cuts on top of ones already introduced in November. The shock announcement sent global crude prices soaring.
The OPEC+ countries said they would introduce voluntary additional cuts to their output, starting from May until the end of 2023, in order to stabilize the oil market.
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April 10, 2023 at 10:36PM