Russia decided to focus on reducing oil production instead of exports in the second quarter to evenly distribute production cuts with other Opec+ member countriesDeputy Prime Minister Alexander Novak declared on Friday.
Earlier this month, Russia said it would cut its oil production and exports in 471,000 additional barrels per day in the second quarter, in coordination with some countries participating in Opec+.
Novak also told reporters that Russian oil companies They will reduce production in proportion to their share in the country's total oil production.
Russia plans to gradually ease export cuts: in April, it will reduce production by an additional 350,000 bpd, with a cut in exports of 121,000 bpd. In May, the additional production cut will be 400,000 bpd and exports will be reduced by 71,000 bpd. In June, all additional cuts will come from oil production.
The world's second largest oil exporter has cut its crude oil exports and fuel in a total of 500,000 bpd in the first quarter, in addition to its previous commitment to reduce production together with other members of the Opec+ group.
Russia's decision to further reduce oil production, not exports, was an unexpected move.
JP Morgan, which earlier this month called it a surprising shift in strategy, said that if Russia delivered on promised cuts, The country's crude oil production should fall to 9 million barrels a day in June, matching Saudi Arabia's production.
Russia currently produces about 9.5 million bpd of crude oil.
“This is a measure (the deepening of production cuts) that is taken so that all countries contribute equally (to the production cuts within the framework of the OPEC+ agreement),” Novak said.
“As you remember, we did not reduce (production) because of the volume, because of the percentage they reduced other countries. We reduced exports. The time has come when, instead of exports, we reduce production,” he added.
Industry sources told Reuters on Monday that the Russian government has ordered companies to reduce oil production in the second quarter to ensure they meet a production target of 9 million barrels per day at the end of June, in line with its commitments to Opec+.
