Russia to cut oil supplies to world markets by 500,000 bpd in August
It is stressed that Russian oil companies will decide on their own whether to reduce production or exports
Russia will voluntarily reduce oil supplies to world markets by 500,000 barrels per day (bpd) in August by cutting exports. This reduction will be in addition to the already announced commitments to reduce production by 500,000 barrels per day.
Russian Deputy Prime Minister Alexander Novak explained that the measure to reduce oil supplies was taken as part of efforts to ensure balance on the oil market.
Novak also stressed that Russian oil companies will decide on their own whether to reduce production or exports, but in general, Russia’s task is to reduce oil supplies to global markets by 500,000 bpd.
Energy Minister Nikolay Shulginov told TASS that Russia already in July had begun to reduce the volume of oil exports as part of voluntary commitments and intends to fulfil them in full in August.
In March, Russia began to voluntarily cut oil production by 500,000 barrels per day from the February average. The validity period of this reduction was extended several times – first until June inclusive, then until the end of 2023. After the OPEC+ meeting, which took place on June 4 in Vienna, the decision to voluntarily reduce production was extended until the end of 2024.
Extension of Saudi Arabia’s voluntary cut in oil production
Apart from Russia’s statement about the reduction of oil supplies, Saudi Arabia also decided to extend the voluntary reduction in oil production by 1 million bpd until August. Initially, this decision was designed only for July with the possibility of its extension.
In August, as in July, the volume of oil production by Saudi Arabia, taking into account the reduction, will amount to 9 million bpd. This voluntary cut of 1 million bpd comes in addition to an earlier decision to reduce production by 500,000 bpd, which is in effect in Saudi Arabia from May to the end of 2024.
