Russia to reduce oil production in the 2nd quarter of 2024

In its reduction rather than exports in the second quarter of 2024, he decided to proceed or to distribute evenly the cuts with the other OPEC+ member countries, according to today’s statements (29.3.2024) by the Deputy Prime Minister, Alexander Novak. Earlier this month, Russia had announced that it would reduce its own oil production and exports additionally by 471,000 barrels daily (bpd) in the second quarter in cooperation with some countries participating in OPEC+. Novak also told reporters that Russian oil companies would reduce production in proportion to their share of the country’s total production. Russia plans to relax export cuts: in April it will reduce production exceptionally by 350,000 bpd, with exports reduced by 121,000 bpd. In May exceptional cuts will reach 400,000 bpd and export cuts will reach 71,000 bpd. Russia, the world’s second largest oil exporter has reduced crude and fuel exports in total by 500,000 bpd in the first quarter, in addition to its commitments to reduce production along with other OPEC+ member countries. Russia’s move to further reduce oil production, not exports, was an unexpected move. JP Morgan, who earlier this month, described it as a surprise change in strategy, said that if Russia turned to the cuts promised, the country’s production of crude oil would be reduced to 9 million barrels daily by June, corresponding to Saudi production. Russia currently produces about 9.5 million bpd of crude oil. “This is a measure (enlarges production cuts) taken so that all countries contribute equally (to production cuts under the OPEC+ agreement),” Novak said. “As you remember, we did not reduce (production) by volume, percentage, reduced by other countries. We had a reduction in exports. This moment came when, unlike exports, we reduce production,” he added. Sources in the industry, they had stated on Monday to the Reuters agency, that the Russian government has instructed companies to reduce oil production in the second quarter to ensure that they achieve the target of producing 9 million barrels daily by the end of June that is consistent with the commitments to OPEC+. Source: RES – ICM