Although Russia hit a post-Soviet record in its oil production last month, it doesn’t plan to raise output to 12 million bpd by the end of 2018, or in the near term, because this wouldn’t fit Moscow’s economic development plans, Energy Minister Alexander Novak told Russian news agency TASS on Tuesday.
In September, Russia’s oil production reached 11.36 million bpd—a record high for the post-Soviet era—after OPEC and its Russia-led non-OPEC allies agreed in June to relax compliance rates with the cuts to 100 percent from the previous over-compliance.
The respective leaders of the OPEC and non-OPEC nations part of the deal—Saudi Arabia and Russia—have been interpreting the eased compliance as adding a total of 1 million bpd to the market.
Russia has already reversed its entire 300,000-bpd cut that was pledged as part of the initial deal and has been adding production in recent months.
This month, Russia’s oil production is around 150,000 bpd higher than its October 2016 level—the baseline for the OPEC+ production cut deal, Novak told TASS today.
Currently, Russia is pumping 150,000 bpd above the October 2016 level, so in total, the country has increased production by 450,000 bpd since May, Novak said. Related: China’s Oil Addiction Is Its Main Weakness As A Superpower
The minister, however, refrained from forecasts about Russia’s production in November, when the U.S. sanctions on Iran snap back. Russia will be monitoring the situation and will plan according to the market conditions, Novak said.
The OPEC+ nations are struggling to fully deliver on the oil production increase of 1 million bpd promised in June, Reuters reported last week, quoting an internal OPEC document that it has seen. Saudi Arabia put the most extra barrels on the market, boosting its production by 524,000 bpd in September compared to May. However, Iran’s production slumped by 376,000 bpd in September from May, Venezuela’s output plunged by 189,000 bpd, and Angola saw its production drop by 17,000 bpd between May and September.
The non-OPEC partners in the deal have increased their combined production by 296,000 bpd since May. Russia boosted production by 389,000 bpd, but part of that increase was offset by declines in Kazakhstan, Mexico, and Malaysia, according to the document.
By Tsvetana Paraskova for Oilprice.com
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