Russia’s crude oil production to date is 140,000 bpd lower than the average daily rate for October 2018, Energy Minister Alexander Novak said as quoted by TASS. The October 2018 average was taken as a basis for the cuts agreed by OPEC and its partners in December.
Yet 140,000 bpd is less than what Russia said it would cut in December, which was over 200,000 bpd. However, Novak warned from the start that the production cuts would be gradual, citing winter conditions that made it harder to reduce production. Russia’s portion is more than 50 percent of the total non-OPEC cut, which stands at 400,000 bpd. The cartel itself is cutting 800,000 bpd.
MarketWatch reported on Sunday the partners in the production cut deal are still split on the question of whether the cuts need to be extended into the second half of the year, which is what Saudi Arabia has indicated it wants. Russia, though, has been reluctant to cut from the start and it is unlikely it will embrace the idea of longer cuts as they do not translate into direct benefits for it.
Earlier, Novak said Russia will achieve full compliance with the OPEC+ cuts by April, which is when the partners will meet to review their progress.
“As far as the meeting is concerned we, of course, discussed the situation with the execution of the agreement (and) we stressed once again that Russia is discharging its obligations in accordance with the agreement to smoothly achieve the target output," Novak told CNBC.
"As for the target output level that forms part of the signed agreement, we plan to reach those figures by the end of March (or) beginning of April. This is earlier than in the same period two years ago by about one month," Novak also said.
By Irina Slav for Oilprice.com
