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Novak: Russia will cut oil output in Q2 to catch up with other OPEC+ countries
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Novak: Russia will cut oil output in Q2 to catch up with other OPEC+ countries
Mar 29, 2024 4:17 AM

*

Russia focuses on cuts in oil output, not exports in Q2

*

Russia to reduce oil output to 9 mln bpd in June - JPM

*

Government orders firms to cut oil output to meet OPEC+

target

(Adds detail, quotes in paragraphs 8 and 9)

By Olesya Astakhova

MOSCOW, March 29 (Reuters) - Russia has decided to focus

on reducing oil output rather than exports in the second quarter

in order to evenly spread production cuts with other OPEC+

member countries, Deputy Prime Minister Alexander Novak said on

Friday.

Earlier this month, Russia said it would cut its oil output

and exports by an additional 471,000 barrels per day (bpd) in

the second quarter in coordination with some OPEC+ participating

countries.

Novak also told reporters that Russian oil companies will

reduce production in proportion to their share of the country's

total oil output.

Russia plans to gradually ease export cuts: in April, it

will reduce output by an extra 350,000 bpd, with exports cut by

121,000 bpd. In May, the extra output cut will be 400,000 bpd

and exports cut by 71,000 bpd. In June, all the additional cuts

will be from oil output.

The world's second-largest global oil exporter has been

cutting crude oil and fuel exports by a combined 500,000 bpd in

the first quarter, in addition to its previous pledge to curtail

production alongside other members of the OPEC+ grouping.

Russia's move to reduce more oil production, not

exports, was an unexpected move.

JP Morgan, which earlier this month called it a

surprising shift in strategy, said if Russia delivered on the

promised cuts, the country's production of crude oil should

decline to 9 million barrels per day (bpd) by June, matching

Saudi Arabia's output.

Russia currently produces around 9.5 million bpd of

crude oil.

"This is a measure (deepening of production cuts) is

taken so that all the countries contribute equally (to

production cuts under the OPEC+ deal)," Novak said.

"As you remember, we did not reduce (production) by the

volume, by the percentage that other countries reduced. We had a

reduction in exports. The moment has come when, instead of

exports, we are reducing production," he added.

Industry sources told Reuters on Monday that Russia's

government has

ordered companies

to reduce oil output in the second quarter to ensure they

meet a production target of 9 million bpd by the end of June in

line with its pledges to OPEC+.

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