As far as I said, I did it! Russia fully complies with crude oil export reduction commitments

Golden10 Data ·  Feb 21 09:30

Russia's crude oil exports fell by about 307,000 barrels last month, but some OPEC+ member countries failed to meet production reduction targets.

Russia achieved its crude oil export reduction target in January and fulfilled its commitments to OPEC+ allies, according to data from the Russian Ministry of Energy.

According to people familiar with the matter, the country's daily crude oil exports last month were 42,000 tons lower than the May-June average. Based on Russia's traditional conversion rate of 7.33 barrels per ton, this is equivalent to about 307,000 barrels per day.

OPEC and its allies have been limiting supply for months to prevent surpluses. After a rapid increase in production from competitors such as the US, OPEC further increased production cuts by 900,000 b/d in the first quarter.

While most member states agreed to cut production, Russia promised to reduce daily oil exports by 500,000 barrels, of which 300,000 barrels come from crude oil and the rest from petroleum products. People familiar with the matter said that last month, Russia's crude oil exports (including shipping and pipeline transportation) averaged 626,000 tons per day, or about 4.59 million barrels per day. Since the data has not been made public, the person requested anonymity.

The Russian Ministry of Energy declined to comment on the level of crude oil exports in January. TASS reported on Tuesday, citing Deputy Prime Minister Alexander Novak, that the country plans to fully implement its OPEC+ commitments this month.

Bloomberg earlier estimated that in the four weeks up to January 28, the average export volume of Russian crude oil by sea was 3.09 million barrels per day, about 500,000 barrels below the level of May to June.

Assessing Russia's compliance with its export targets for refined oil products is more challenging. According to people familiar with the matter, last month, the country's petroleum product flow rate and the May-June baseline fell by 9,500 tons per day, reaching around 324,000 tons per day.

However, this data reflects a basket of different petroleum products, and the unit conversion for each product is different, making it difficult to determine the exact quantity.

According to data compiled by the OPEC Secretariat in Vienna, although Russian data shows that the country has fully implemented the crude oil export reduction plan, other countries such as Iraq and Kazakhstan have failed to achieve their production reduction targets. Both countries have pledged to fully abide by their commitments over the next few months.

OPEC+ said the alliance's plans to cut production after the first quarter will depend on market conditions. Oil watchers expect OPEC+ will somehow extend the restrictions until the second quarter to further curb oversupply.

In addition to cutting exports, Russia has promised to reduce crude oil production by 500,000 b/d by the end of this year. According to Ministry of Energy data, its production in January was about 490,000 b/d below the February 2023 benchmark.

The translation is provided by third-party software.

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