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Russia will cut its crude oil exports by 500,000 barrels per day (bpd) in August in a bid to ensure a balanced market, Russia’s Deputy Prime Minister Alexander Novak said on Monday.
“As part of the efforts to ensure a balanced market, Russia will voluntarily reduce its oil supply in August by 500,000 barrels per day by cutting its exports to global markets by that quantity,” Novak said in a brief statement.
The top oil official in Russia didn’t give any figures as to the volume of the Russian production and exports for August, nor the baseline from which the cut would be made.
The August cut in exports would mean an additional cut in oil production by 500,000 bpd in August, Novak’s office told Russian daily Vedomosti.
The Russian announcement came minutes after Saudi Arabia said it would extend its unilateral oil production cut of 1 million bpd into August.
Saudi Arabia will be producing around 9 million bpd in both July and August after extending the voluntary cut into next month.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC Plus countries with the aim of supporting the stability and balance of oil market,” Saudi Arabia said today.
Russia, for its part, has enjoyed resilient crude oil exports – much higher than anticipated last year – even after the Western sanctions and the price cap on its crude and petroleum products. China and India are snapping up cheap Russian barrels, and Russian exports for most of June were still around 250,000 bpd higher compared to February, which serves as a baseline for the 500,000-bpd production cut Russia has promised this year.
Today’s nearly simultaneous announcements from Russia and Saudi Arabia are noteworthy, after Saudi Energy Minister Prince Abdulaziz bin Salman said at the latest OPEC+ meeting in early June, referring to Russia, “We discussed with Russia the issue of its production and asked it to clarify its data, and we have strengthened the concept of transparency with Russia about its oil production figures.”
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.