Russia nears achievement of OPEC + oil production reduction target

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The leader of the non-OPEC group of the OPEC + pact, Russia, shows an unprecedented commitment to the record collective production cuts underway by almost respecting its share of the reductions.

Under the OPEC + agreement concluded in April, Russia has committed to reduce its production to 8.5 million bpd in May and June compared to February 2020, or by 19%, from February 2020 , Russian Minister of Energy Alexander Novak told Interfax in an interview with Avril.

Russia has had to cut oil production from around 11 million bpd to 8.5 million bpd – and many analysts have expected Moscow not to be able to fully comply with its share of the cuts.

But so far in June, Russia’s crude oil production has averaged 8,549 million bpd, according to estimates by the Russian news agency TASS, based on official government figures. This production level between June 1 and June 15 is just above the 8.5 million bpd ceiling for Russian crude oil production under the agreement.

As early as mid-May, Russia signaled that it would try to fulfill its commitment to the OPEC + agreement. Between May 1 – the start of the new cuts – and May 19, Russian crude oil production averaged 8.72 million b / d, according to Reuters estimates. For the month of May, crude oil production in Russia averaged 8.59 million bpd, and estimates now show that Moscow is nearing the target of 8.5 million bpd in June.

In these record cuts in response to the collapse in demand for oil, OPEC + pact leaders – Saudi Arabia and Russia – urged all laggards (like Iraq and Nigeria) to fully respect the cuts before accept a month. extension of record production reductions.

Earlier this month, OPEC + agreed to extend record production reductions of 9.7 million bpd by one month at the end of July, subject to all pact countries meeting 100% of their quotas. and compensate for their non-compliance by exceeding the reductions. in July, August and September.

By Tsvetana Paraskova for Oilprice.com

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