Russian oil companies pumped 16 percent less oil last month than a year earlier, government data reported by Interfax showed.
At 39.63 million tons, Russia's average daily output for July was equal to 9.35 million bpd based on a conversion rate of 7.33 barrels per metric ton of oil. Reuters, however, cited Energy Ministry data that showed a daily average of 9.37 million barrels, which was slightly higher than the June average, which stood at 9.32 million bpd. The ministry commented that this rate of production was in line with Russia's commitment to the OPEC+ production cut deal.
Russia had one of the deepest production cut quotas in the OPEC+ group along with Saudi Arabia, at 2 million bpd. It took a while to achieve this level of output reduction, and starting from this month, it will increase the average daily output by some 400,000 bpd as the deepest cuts OPEC+ agreed in April expired at the end of July.
According to the original agreement, OPEC+ was to cut 9.7 million bpd in combined production for two months-May and June-and then ease these to 7.7 million bpd, to stay in effect until the end of the year. Then, from January 2021, the production cuts would be further eased to 5.8 million bpd, to remain in effect until end-April 2022.
While there has been speculation that the group may decide to extend the deepest cuts beyond the end of July, OPEC+ has stopped short of doing that even though international benchmark prices are still a lot lower than Middle Eastern producers are comfortable with.
Prices fell today, too, as the market reacted to the start of production cut relaxation for most OPEC+ members, except laggards Iraq, Nigeria, and Angola, which failed to comply with their production quotas in the first couple of months of cuts.
By Irina Slav for Oilprice.com
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