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A month before OPEC and allies are set to discuss the future of their production cut deal, the leader of the non-OPEC group, Russia, appears to have finally fallen in line with its share of the cuts, producing below its OPEC+ quota for the month of May.
Russia’s oil production between May 1 and 16 averaged 11.156 million bpd, Reuters reported on Friday, quoting two industry sources, which means that Moscow is now below its quota under the production cut deal.
As part of the OPEC+ production cuts between January and June, Russia is taking the lion’s share of the non-OPEC cuts and pledged to reduce production by 230,000 bpd from October’s post-Soviet record level of 11.421 million bpd, to 11.191 million bpd.
In the first twelve days of May, Russia’s crude oil production was said to have averaged 11.16 million bpd, although the decline in production may have been the result of restricted exports via the Druzhba oil pipeline due to a contamination issue.
Last month, Russia halted supplies via the Druzhba oil pipeline to several European countries due to a contamination issue, which the Russians say was deliberate. Russian production has been curtailed because of the restricted exports via the Druzhba pipeline.
Estimates that Russia is finally within its quota under the OPEC+ deal come days before a panel of ministers from OPEC and Russia are scheduled to meet this weekend in Jeddah, Saudi Arabia, to discuss the state of the oil market and review compliance with the cuts.
At this weekend’s meeting, discussion could revolve around a possible production increase after the end of the U.S. sanction waivers to all Iranian oil buyers. Talk of raising—instead of cutting—production would be in line with Russia’s ambition to resume pumping more as its companies benefit from higher production as much as from higher oil prices and have seen their new field production plans stalled by Russia’s commitments to the OPEC+ deals.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.