Russia is discussing with its OPEC+ partners the possibility of extending oil-export cuts into October, but no decision has been made so far, Interfax reported, citing Deputy Prime Minister Alexander Novak in Moscow.
(Bloomberg) — Russia is discussing with its OPEC+ partners the possibility of extending oil-export cuts into October, but no decision has been made so far, Interfax reported, citing Deputy Prime Minister Alexander Novak in Moscow.
The decision will depend on the market situation, Novak said according to the state news agency Tass, which was reporting from the same event.
The statement from the nation’s top energy official and main negotiator with the Organization of Petroleum Exporting countries comes as global crude markets are tightening, but the summer price rally has stalled on mounting concern over China’s economic growth.
Saudi Arabia, the de-facto OPEC leader and Russia’s close ally in the oil market, is expected to extend its own voluntary oil production cuts for another month, according to traders and analysts surveyed by Bloomberg.
Saudi Arabia Expected to Prolong Oil Cut Again, Survey Shows
Russia is committed to its earlier pledge of cutting exports in September by 300,000 barrels a day compared to the average May to June level, Novak said, giving the baseline for the reductions for the first time. Earlier the nation pledged to curb its crude exports by 500,000 barrels a day in August.
While Novak didn’t provide the baseline figure, industry data seen by Bloomberg show that the country exported an average of 4.86 million barrels a day from May to June by sea and pipelines. In July, crude supplies to foreign markets averaged some 4.28 million barrels a day, or about 574,000 barrels a day below the baseline.
The bulk of those barrels were redirected to the domestic market as Russian refineries completed seasonal maintenance and increased their oil processing last month. The nation’s producers raised crude supplies to refineries by some 303,000 barrels a day, compared with the average from May to June, to 5.66 million barrels a day in July, according to Bloomberg calculations based on industry data. The exports and refinery data indicate Russia’s crude production in July was lower than the average from May to June.
Russia complied with its obligation of keeping a cap on its crude production in August, Novak said. The nation has pledged to reduce output by 500,000 barrels a day and keep it at that level through 2024.
(Updates with industry data on exports in sixth and seventh paragraphs.)
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