According to a recent report by the International Energy Agency (IEA), Russian oil exports have reached their lowest levels in two years, resulting in a significant decline in revenues. The data reveals that Moscow’s shipments of crude and petroleum products dropped by 600,000 barrels per day (bpd) in June, reaching a low of 7.3 million bpd. This represents the lowest level since March 2021. In terms of export revenues, there was a notable decrease as well, with earnings nearly halving to $11.8 billion last month, compared to $20.4 billion in June 2022.
While these figures may seem concerning, the IEA’s monthly Oil Market Report suggests that Russian oil output in August might remain stable. This positive outlook is attributed to a seasonal rise in domestic market demand, which could offset the impact of the announced production cut. A representative from Russia’s Energy Ministry previously mentioned to TASS news agency that “supplies would be lowered in addition to earlier assumed commitments on the voluntary production cut.”
This decline in oil exports follows Russia’s decision in February to voluntarily reduce oil production by 500,000 bpd starting in March. The move was a response to a Western-imposed price cap of $60 a barrel, which Moscow considers unacceptable and non-market driven. Furthermore, Russia recently announced additional cuts of 500,000 bpd starting in August, mirroring a similar decision made by Saudi Arabia. The Saudi government extended its voluntary crude output cut of 1 million bpd for another month, including August. Collectively, these cuts will account for 1.5% of global supply.
As Russia adjusts its oil production and export levels, it is essential to consider the wider implications for the global economy. Oil is a critical commodity that affects various sectors, from transportation to energy production. Understanding these dynamics is crucial for policymakers, market analysts, and consumers alike.
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