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Why Venezuela’s Oil Based Cryptocurrency Is Still Alive

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governments new digital oil-backed currency,…

Russia To Cut More Oil Production As Exports Restricted

Transneft

Russia’s oil production will be cut by another 1 million barrels per day over the next week after its oil exports were restricted due to contamination issues, according to Reuters.

The contaminated crude oil was shipped through Transneft’s Druzhba pipeline, causing the pipeline operator to call on Russian oil producers to request reduced volumes—a 10 percent reduction.

The contamination issue—which Transneft says was deliberate—has been quite a headache for Russia, but European refineries are taking most of the brunt, and have caused Poland, the Czech Republic, and Hungary to release 8 million barrels of oil reserves to keep their refineries refining, and comes at a time when the market is already nervous about tightening supplies as crude production falls in Iran and Venezuela.

Russia’s oil production had already fallen in April to 11.23 million barrels per day, although the levels were still above its production quota that it agreed to with OPEC of 11.191 million bpd. Russia has dropped hints over the last month that it may be reluctant to extend the oil quotas past June—although it has yet to reduce production to those levels.

Saudi Arabia has vowed to respond to market needs as they arise should a shortage occur, but Saudi Arabia was referring to the production losses in Venezuela and Iran—not Russia.

Transneft is largely expected to resume oil flows over the next couple of weeks, although it may take some time to repair any damaged refinery equipment as a result of the corrosive contaminates found in the crude oil.

A criminal investigation is underway to locate the source of the contaminated crude oil. The first clean oil arrived in Belarus today since the complaints of contamination were made. 

By Julianne Geiger for Oilprice.com

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