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Russia plans to cut oil output by 300,000 barrels per day

The reduction is expected to happen by the end of April, and would bring Russia into compliance with an OPEC-brokered deal to reduce oil output.

By Daniel J. Graeber
Russia says it will cut 300,000 barrels of oil per day from its production levels by the end of the month in coordination with an OPEC-led agreement. File Photo by tcly/Shutterstock
Russia says it will cut 300,000 barrels of oil per day from its production levels by the end of the month in coordination with an OPEC-led agreement. File Photo by tcly/Shutterstock

April 12 (UPI) -- According to state media in Russia, the country's oil minister has upped the ante on how much the country will cut out of its production levels through June.

"Our plans have not changed -- by the end of the month we will reduce daily reduction of oil output of 300,000 barrels," Russian Energy Minister Alexander Novak was quoted as saying by state news agency Tass. "We will maintain this level in May-June."

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Tass reported Tuesday that total crude oil production from Russia last month was 11.04 million barrels per day, about 67 percent toward a quota outlined in a deal with OPEC, but also cited the minister as saying cuts by the end of April would be 250,000 barrels per day.

Russia is the largest non-member contributor to an arrangement by the Organization of Petroleum Exporting Countries to balance the global market for oil through production cuts. Parties to the deal meet to consider the terms next month and it's widely expected the arrangement will be extended for another six months.

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Figures posted on Twitter by pricing group S&P Global Platts note official data from Russia show March oil production at 10.3 million barrels per day, about 60,000 barrels per day less than the first two months of the year. The average production for the first quarter of the year stands at around 11.2 million barrels per day, 130,000 barrels per day lower than the fourth quarter, but 120,000 barrels per day higher year-over-year.

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"Most Russian producers have reduced production month-over-month since January," the report from Platts read.

Novak's most recent comments align with Russia's pledge to OPEC to cut 300,000 barrels per day by May. Coordinated production declines from all contributing non-member states would be 558,000 barrels per day if all parties are in total compliance.

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Participating OPEC members are touting compliance amid a sustained rally in crude oil prices, fueled in part by geopolitical tensions. In its monthly market report for April, secondary sources told OPEC economists that member-state production declined in March by 152,000 barrels per day to 31.9 million barrels per day.

Despite bullish calls from Riyadh on compliance, the price of oil and the terms of the arrangement, secondary sources reported total Saudi oil production last month was just shy of 10 million barrels per day for a gain of about a half percent from February.

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