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The 12 Russian oil companies that will participate in the non-OPEC/OPEC oil production cut will set up a working group to monitor the implementation of the agreement, Energy Minister Alexander Novak said.
Russia and another 10 non-OPEC producers agreed last week to contribute 588,000 bpd to OPEC’s agreed 1.2 million bpd reduction of oil production in a bid to restore the balance between global supply and demand.
At the time, OilPrice noted that a fair portion of the cut by non-OPEC members will come from passive rather than active measures. Russia seasonally decreases production by about 150,000 bpd in the spring, and Mexico has said that its contribution to the cut will be the result of a “managed natural decline”, meaning it will just let output at mature fields fall without trying to increase it. According to Bloomberg, this is the likely approach that Azerbaijan will adopt as well, and possibly other non-OPEC producers, too.
Investors are also increasingly suspicious of OPEC itself: it has emerged that Iraq is raising crude oil deliveries for January, instead of cutting them. To compare, Saudi Arabia and Kuwait have announced they will export less oil in January, the month when the cut is supposed to go into effect.
According to an oil-loading schedule dated December 8 and viewed by The Wall Street Journal, Iraq’s state-owned oil marketing company SOMO plans to increase shipment of its Basra export grades to 3.53 million barrels per day in January, which would be a 7-percent increase from October volumes—an increase that is no small matter, as Basra grades sales account for around 85 percent of Iraqi crude exports.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.