Russia will voluntarily reduce its oil production by 500,000 barrels per day in March
Russia currently sells all the oil volumes produced
In March 2023, Russia will voluntarily reduce its oil production by 500 thousand barrels per day. That will contribute to the recovery of market relations amid the implementation of oil price cap, press center of RF Government cites Deputy Prime Minister Alexander Novak.
“We regard the price cap on Russian oil and petroleum products as interference in market relations and continuation of the destructive energy policy of the collective West. It may not only provoke a decrease in investments in the oil sector and, consequently, an oil shortage, but can also be spread to other sectors of the global economy, with similar consequences, in the future,” said Alexander Novak.
According to him, one step Russia has taken to neutralise threats to the global oil market is a ban on direct or indirect reference to any illegitimate restrictions in the oil supply contracts.
“Today we are marketing the entire amount of oil we produce, but, as it has previously been stated, we will not sell oil to those who directly or indirectly apply the price cap principle,” said Deputy Prime Minister adding that Russia’s subsequent decisions will be based on the emerging market situation.
According to Rosstat, Russia’s oil production in November 2022 (before export restriction) was 10.85 million barrels per day.
Alexander Novak earlier said that Russia has already negotiated the supply of petroleum products for February despite the embargo imposed by the European Union’s member states on February 5.
Russia has already negotiated the supply of petroleum products for this month despite the embargo imposed by the European Union’s member states on February 5, TASS cites Deputy Prime Minister Alexander Novak as telling reporters.
On December 5, 2022, an embargo on maritime Russian oil shipments to the European Union came into force. G7 nations, the EU and Australia agreed on a price cap for Russian oil delivered by sea, setting the ceiling at $60 a barrel. Moreover, starting February 5, 2023, similar restrictions on deliveries of petroleum products from Russia were enforced as the EU Council officially greenlighted the decision, in conjunction with the G7, to introduce a price ceiling on Russian petroleum products supplied by sea at $100 for premium oil and at $45 for discount.
In February 2023, OPEC+ reaffirmed their commitment to the plan to reduce oil production by two million barrels per day, agreed upon following the meeting on 5 October 2022. When speaking at the meeting, Alexander Novak said that oil reserves in the world are below the average five-year values today, and there are many uncertainties in the oil market related to the level of supply and demand. But inflation expectations for the economies of Western countries remain high, which affects the level of demand for energy.
