In order to maintain balance in the global oil market, Russian oil producers have announced that they will decrease their exports by 300,000 barrels per day (bpd) starting from September. This decision was revealed by Deputy Prime Minister Alexander Novak, who emphasized the importance of ensuring a balance of supply and demand in the market. Novak stated, “As part of efforts to ensure the oil market remains balanced, Russia will continue to voluntarily reduce its oil supply in the month of September, this time by 300,000 bpd, reducing exports by that quantity to global markets.”
This move by Russia, the second-largest oil exporter in the world after Saudi Arabia, comes in addition to their previous commitment to cut production by 500,000 bpd from March until the end of this year. By implementing these cuts, Russia aims to stabilize crude prices and support market equilibrium.
Following Russia’s announcement, Saudi Arabia also confirmed plans to extend their voluntary oil output cut for another month. The kingdom’s production in September will be around nine million bpd. Riyadh has further suggested that the cut could be prolonged or deepened, depending on market conditions.
Both Russia and Saudi Arabia are members of OPEC+ – a group consisting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia. In October, OPEC+ agreed to reduce their output by approximately 2% of global demand from November 2022 until the end of 2023. Later, additional production curbs were implemented by the group to further balance the market.
Since the initial supply cuts were announced by Russia and Saudi Arabia in early July, global oil prices have witnessed a significant increase. Brent crude, for instance, has surged from around $76 per barrel to above $85 per barrel at present. This upward trend in prices reflects the impact of the production cuts on the market.
In conclusion, Russia’s decision to decrease oil exports by 300,000 bpd in September is part of their ongoing efforts to maintain a balanced market and stabilize crude prices. This move complements their earlier commitment to reduce production by 500,000 bpd until the end of the year. As oil exporters around the world continue to coordinate their efforts, the goal remains to support market equilibrium and ensure the stability of global oil prices.
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