Russia’s recent pledge to lower oil exports in August will not require a similar cut in production, a government source told Reuters on Friday.
“Russia will probably not have to cut production in August due to increased consumption in the domestic market. As we know, prices are going up and there is not enough fuel,” the source indicated.
This followed Moscow’s announcement that it will reduce oil exports by 500,000 barrels per day (bpd) in August to nudge up global oil prices in concert with Saudi Arabia.
Deputy Prime Minister Alexander Novak commented: “Within the efforts to ensure the oil market remains balanced, Russia will voluntarily reduce its oil supply in the month of August by 500,000 barrels per day by cutting its exports by that quantity to global markets”
Brent crude oil increased by 1.6% to $76.60 a barrel after Russia’s announcement and a statement from Saudi Arabia that it would extend its voluntary output cut of 1 million bpd for another month in order to include August.
In spite of Western sanctions, Russia’s exports remained solid, as the country already pledged to reduce its output by 500,000 bpd to 9.5 million bpd from March until year-end.
It is worth highlighting that Russia is the world’s second-largest oil exporter after Saudi Arabia.
