1 Dec 2023 09:38

Russia deepens crude, oil product export cut by 200,000 bpd, extends it to Q1 2024

MOSCOW. Dec 1 (Interfax) - Russia will deepen its additional voluntary crude oil and refined product supply cut of 300,000 barrels per day by another 200,000 bpd to reach 500,000 bpd, and will extend this cut to the end of the first quarter of 2024 in coordination with certain OPEC+ countries, Deputy Prime Minister Alexander Novak was quoted as saying by the government's press service.

"This cut will be made from the average export levels of the months of May and June of 2023, and will consist of 300,000 barrels a day of crude oil and 200,000 barrels per day of refined products," Novak said in the statement.

Subsequently, "in order to support market stability, these additional cut volumes will be returned gradually subject to market conditions," he said.

Russia also held a meeting with five of the approved secondary sources which assess production conformity in the OPEC+ agreement, and five export assessment agencies in order to facilitate the accuracy and reliability of their assessment which will continue to be done on a monthly basis, Novak said.

Russia's official oil production quota for 2024 is 9.95 million bpd. However, Russia has been voluntary cutting output by 500,000 bpd since February 2023 and this cut was later joined by some OPEC+ countries, including Saudi Arabia (500,000 bpd), Iraq, Kuwait, Kazakhstan and Oman for a total of 1.66 million bpd. They decided in June to extend the overall cuts to all of 2024.

Saudi Arabia has been cutting output by further 1 million bpd to 9 million bpd since July; its official quota for 2023 and 2024 is 10.5 million bpd. In July, Russia cut oil exports by another 500,000 bpd compared to the May-June level, but in September this cut was reduced to 300,000 bpd.

Russia later extended this cut to the end of the year, and Saudi Arabia did the same with its cut of 1 million bpd. Russia did not clarify by how much production would be reduced, saying only that this refers to supplies of crude and oil products.