Russia to deepen supply cuts by another 50,000 b/d - Novak

Oil market analysts have categorised this move as one of Russia's constant attempts to regain control over global oil prices.

PHOTO: Oil pump jacks with the Russian flag in the background. Getty Images

Russia plans to trim its oil production by at least 50,000 b/d this month, Russian deputy prime minister Alexander Novak said according to state-owned media agency TASS.

“OPEC and Russia are trying to regain control of oil prices as Russia said it would deepen oil export cuts in December by potentially 50,000 barrels a day or more,” said Price Futures Group’s senior market analyst Phil Flynn.

The 50,000 b/d will come in addition to an existing 1.5 million b/d cut that Russia has already pledged this year, as a bid to “bring a balance” to the oil market.

"In December we will add additional volumes [to the cuts]. The figure will be more than 300,000 [b/d]. We will decide based on the results of December. Maybe the additional volume will reach 50,000 barrels [50,000 b/d]. Maybe more," TASS quoted Novak saying.

Russian oil exports are expected to total less than 247 million mt this year, “which is lower than the current macro forecast,” Novak added.

Oil supply cuts made in 2023

Russia initiated a voluntary oil production cut of 500,000 b/d in March, compared to its average production level in February. The country reduced output by an additional 500,000 b/d in August, for a total of 1 million b/d to supplement the production cuts made by other OPEC+ members.

In September, Russia cut output by another 300,000 b/d and said it would extend this measure through to the end of this year.

In November, Russia deepened this crude oil and oil products output cut from 300,000 b/d to 500,000 b/d - for a total cut of 1.5 million b/d, which will be in effect until March 2024, TASS reported.

This could now increase to 1.55 million b/d, or more, as Novak says. Russia will stick to the obligations it has made to OPEC+ into next year as well, he adds.

By Aparupa Mazumder 

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