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Russia exported 36.65 million barrels (5 million tons) less crude oil in the first ten months of the year, not least because of its participation in the OPEC+ pact to reduce global supply. This is what the head of Russia’s oil pipeline monopoly Transneft said in an interview with a TV channel, as quoted by TASS news agency.
The cuts worked, however, raising oil prices substantially enough that Russia booked a hefty increase in the value of its oil shipped abroad. According to customs data cited by TASS, this rose by 38.6 percent to reach US$106.59 billion.
Russia first agreed to cut its production alongside OPEC in late 2016, when it became clear that global oil prices would not reverse their decline without help. At the time, Russia committed to cuts amounting to 300,000 bpd from its record-high at the time output rate of over 11.2 million bpd.
This year, after the OPEC+ club struck an agreement to once again begin reducing global supply in response to a price drop determined by weaker demand projections and oversupply worries, Russia said it will contribute a little over 200,000 bpd of the total 1.2-million-barrel cut.
Soon after the cut agreement was reported, Russia’s Energy Minister Alexander Novak said it would take Russian oil companies months to reduce their production to the desired level. Novak cited seasonal factors, which made it difficult to implement the cuts quickly.
Yet Russia hasn’t got so much to worry about even if prices stay where they are: before the meeting in Vienna, Russia made it clear it does not mind Brent at US$60 a barrel. Indeed, prices refused to move much in the aftermath of a tense meeting between OPEC members and their partners. Now prices are moving up, after the International Energy Agency said in its latest monthly report it expected tightened supply next year when the cuts’ effect began to be felt.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.