Inspenet July 9, 2023.
In an effort to balance the market, Russia will cut its crude oil exports by 500,000 barrels per day (bpd) during the month of August , Russian Deputy Prime Minister Alexander Novak said.
Novak stated in a brief statement: “As part of our efforts to ensure a balanced market, Russia will voluntarily reduce its oil supply in August, cutting exports to global markets by 500,000 barrels per day.”
Implications of reduced oil exports
Although exact figures on Russian production and exports for August were not provided, nor was the baseline from which the cut would be made, Novak’s office told the Russian newspaper Vedomosti that the reduction in exports would imply a decrease additional oil production by 500,000 bpd during August.
This Russian announcement came shortly after Saudi Arabia announced that it would extend its unilateral oil production cut of 1 million bpd until August.
Saudi Arabia has decided to produce around 9 million barrels per day (bpd) in both July and August, after extending its voluntary cut until next month.
The country mentioned that this additional cut is aimed at supporting the stability and balance of the oil market, thus reinforcing the precautionary efforts made by OPEC+ countries.
On the other hand, Russia has maintained robust crude oil exports, exceeding expectations last year, despite Western sanctions and price caps imposed on its crude and derivative products.
China and India have been buying barrels of Russian oil at lower prices, leading to Russian exports for much of June still being around 250,000 bpd higher compared to February, which serves as a benchmark for cutting prices. production of 500,000 bpd that Russia committed to carry out this year.
The simultaneous announcements by Russia and Saudi Arabia are notable, especially after Saudi Energy Minister Prince Abdulaziz bin Salman asked Russia to clarify its production data during the last OPEC+ meeting in early June. It has sought to strengthen transparency with Russia in relation to its oil production figures.
The reduction in Russian exports could have implications, especially at the international level, since it could impact the global supply of oil and cause adjustments in crude oil prices.
Source and photo: https://oilprice.com/Latest-Energy-News/World-News/Russia-Says-It-Will-Reduce-Oil-Exports-By-500000-Bpd-In-August.html
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