In a move aimed at stabilizing global oil prices, Russia announced on Sunday its intention to deepen oil export cuts by potentially 50,000 barrels per day (bpd) or more in December, ahead of schedule. This decision comes as part of a collaborative effort with Saudi Arabia, the world’s second-largest oil exporter, to address the ongoing challenges facing the oil market.
The call for enhanced output cuts was initiated in December by Saudi Arabia and Russia, who urged all OPEC+ members to join the agreement. OPEC+ is a coalition that includes the Organization of the Petroleum Exporting Countries, Russia, and other oil-producing allies.
Russian President Vladimir Putin‘s visit to Riyadh shortly after the OPEC+ meeting highlighted the commitment to finding solutions to the volatility in global oil prices. Alexander Novak, Russian Deputy Prime Minister and a key figure in the country’s oil and gas sector, emphasized Russia’s commitment to further reductions beyond the initially agreed-upon 300,000 bpd for this year.
“Already in December, we will add additional volumes,” stated Novak, as reported by Interfax news agency. “By how much, we’ll see based on the results of December — there may be an additional 50,000 bpd, maybe more.”
Russia had previously committed to a cut of 300,000 bpd compared to May-June exports, maintaining that level until the end of the year. In a bid to strengthen the agreement, Russia has now agreed to deepen these cuts to 500,000 bpd in the first quarter of 2024, according to Russian news agencies.
Novak acknowledged that due to the commitments made to OPEC+, Russia’s oil exports in 2023 would amount to less than the 247 million tons outlined in the country’s main macro-economic forecasts. This move reflects Russia’s dedication to supporting global efforts to stabilize oil prices and maintain a balance in the market.
RUSSIA'S DEPUTY PM NOVAK: RUSSIA WILL INCREASE OIL EXPORT CUTS AS PART OF OPEC+ DEAL ALREADY IN DECEMBER, THE NUMBER IS TO EXCEED 300K BPD BY MAY-JUNE – IFAX.
— Breaking Market News (@financialjuice) December 17, 2023
In addition to addressing oil production, Novak expressed optimism regarding negotiations between Gazprom and Chinese producer CNPC for the Power of Siberia-2 pipeline. This pipeline is expected to carry approximately 50 billion cubic meters of gas annually from Yamal in northern Russia to China via Mongolia.
“We expect that the company should reach an agreement as soon as possible,” Novak stated, expressing hope that a consensus on contract conditions for gas sales through the Power of Siberia-2 pipeline would be achieved promptly.
The move to deepen oil export cuts aligns with Russia’s commitment to international collaboration in the face of economic challenges. As the world’s largest oil exporters navigate the complexities of the global market, these efforts aim to bring stability and sustainability to the oil industry, benefiting both producing nations and consumers worldwide.
Feature Image Credit: Bloomberg News, Bloomberg News
Comments are closed.