Russia will reduce the amount of oil it ships to the market by half a million barrels per day, the Russian energy ministry said on Friday—this is in addition to the earlier assumed commitments of its voluntary production cut.
"Russia confirms it will reduce supplies to oil markets by 500,000 barrels per day in August through lowering of exports. It means taking all the requisite measures to achieve this goal within the framework of the voluntary reduction. This reduction complements the voluntary decrease Russia announced earlier and which was extended until the end of December 2024," the Energy Ministry said in a statement on Friday, according to TASS.
Russian Deputy Prime Minister Alexander Novak said earlier that Russia had voluntarily agreed to cut oil supplies to the market by half a million barrels per day in August by cutting exports.
"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," Russia's Deputy Prime Minister and top OPEC negotiator Alexander Novak said earlier this week, adding that the cut in exports would lead to a cut in production.
The export cuts come as Brent crude oil prices climb over $78 per barrel. The price of Russian ESPO crude, which goes to China, rose to the highest in seven months earlier this week as Chinese buyers rushed to buy it ahead of an announced 500,000-bpd cut in exports next month. Earlier this week, ESPO was trading at a $4 per barrel discount to Brent crude, or $6 per barrel above the G7 price cap—and that was before today's $2 Brent price increase.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.