Moscow had earlier pledged to voluntarily reduce production by 500,000 barrels per day starting in March
Shipments of Russian oil have started to decline from February levels, a sign that Moscow is carrying out its plan for a voluntary cut in output, Bloomberg reported this week, citing ship-tracking data.
Russian seaborne crude exports fell by 205,000 barrels per day (bpd) to 3.21 million bpd on a four-week average basis in the period to July 9 and were down compared to the 3.38 million bpd in the four weeks to February 26, the outlet said.
In February Russia pledged to voluntarily cut oil production by 500,000 bpd starting in March. The move followed a Western-imposed price ceiling of $60 a barrel, which Moscow views as a non-market mechanism and deems unacceptable.
Bloomberg linked lower seaborne oil shipments to reduced flows from Russia’s western ports that used to deliver crude to the EU prior to Western sanctions.
At the same time, the outlet claimed the Russian oil output cut was lower than an initially announced 500,000 barrel-per-day reduction.
“Figures from Russia’s Energy Ministry on crude production show that the nation failed to fully implement its pledged output cuts in June. Crude output averaged 9.599 million barrels a day, only 350,000 barrels a day lower than in February,” the outlet said.
Meanwhile, Russian refineries bolstered processing capacity to their highest levels in 12 weeks in the first days of July, fueled by solid demand for refined oil products abroad, Bloomberg noted.
The decline in crude exports comes after Russia followed Saudi Arabia in announcing further curbs earlier this month, in a move described by Saudi Energy Minister Prince Abdulaziz bin Salman as “quite telling” teamwork between Riyadh and Moscow.
Saudi Arabia said it would extend its voluntary crude output cut of one million bpd for another month to include August, while Russia simultaneously announced a 500,000 bpd drop in exports next month. The cuts will amount to 1.5% of global supply.
The Saudi energy minister described Russia’s oil production cut as meaningful because it affects exports, which can be measured more effectively than production. He noted that the move had been voluntary, not imposed.
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