RUSSIA SAYS IT WILL REDUCE OIL EXPORTS BY 500,000 BPD IN AUGUST, OIL RISES

Mon 03 July 2023:

Russia will cut oil exports by 500,000 barrels per day (bpd) in August, President Vladimir Putin’s point man on oil said on Monday, as Moscow seeks to nudge up global oil prices in concert with Saudia Arabia, Reuters reports.

Brent crude oil spiked as much as 1.6 per cent to $76.60 a barrel after the Russian announcement and a statement from Saudi Arabia that it would extend its voluntary output cut of 1 million bpd for another month to include August.

“Within the efforts to ensure the oil market remains balanced, Russia will voluntarily reduce its oil supply in the month of August by 500,000 barrels per day by cutting its exports by that quantity to global markets,” Deputy Prime Minister, Alexander Novak, said.

The Russian announcement came just minutes after the Saudi statement.

Novak’s spokeswoman declined to say whether Russian oil output would decline by the same amount as its exports.

Russia’s exports have stayed strong, despite Western sanctions. It has already pledged to reduce its output by 500,000 barrels per day (bpd) to 9.5 million bpd from March until year-end.

Russia is the world’s second largest oil exporter after Saudi Arabia, whose Crown Prince, Mohammed bin Salman, spoke to Putin on 27 June.

Both Riyadh and Moscow have been trying to keep the price of oil high. Brent has dropped from $113 per barrel a year ago because of concerns of an economic slowdown and ample supplies from major producers.

Igor Sechin, head of Russian energy major, Rosneft, said last month that Russia was losing out to other OPEC+ countries because it exported a smaller share of its oil production.

Sechin said some OPEC+ countries were exporting as much as 90 per cent of their output, whereas Russia puts only half of its production onto the global market.

Russian Urals crude oil prices in June averaged $55.28 a barrel, down from $87.25 a year earlier, and below Western price caps, the Finance Ministry said on Monday.

The average Urals price for the first six months of the year was $52.17 a barrel, the Ministry said, down from $84.09 in the same period a year earlier.