1 Sep 2023 15:21

Russia will reduce oil exports as of Sept.1, this time by 300,000 bpd, Saudi Arabia to extend voluntary production cuts

MOSCOW. Sept. 1 (Interfax) - Starting September 1, Russia will limit oil shipments to foreign markets by 300,000 bpd, and Saudi Arabia will extend its voluntary production cut by 1 million bpd for the third month in a row.

"As part of efforts to balance the market, Russia will continue to voluntarily reduce supplies to oil markets in September, now by 300,000 bpd, by cutting exports by the indicated amount," Deputy Prime Minister Alexander Novak said in early August.

He later clarified that the average level in May-June is serving as the benchmark for the reduction in shipments to international markets. "We are providing [a reduction in supply] relative to those prior months," he said.

Russia's oil exports in September should increase 200,000 barrels per day compared to August.

Novak previously noted that companies themselves decide whether to resort to reducing production when exports decline. "Our task is to reduce supply to world markets," he said.

In turn, Saudi Arabia in September will extend its voluntary reduction in oil production at the level of 1 million bpd. For the first time, the Minister of Energy of the Kingdom, Prince Abdulaziz bin Salman, announced this measure during a meeting of OPEC+ ministers in early June. This means oil production in Saudi Arabia will reach 9 million bpd for the third month in a row.

With additional restrictive measures by key OPEC+ producers, oil prices have continued to rise moderately over the past two months. They are currently at $86/bbl, more than $10 higher than when Saudi Arabia's voluntary cut began in July.