In line with its agreement with OPEC to reverse part of the cuts, Russia is boosting its crude oil production, pumping as much as 11.193 million bpd in the first four days of July, up from 11.06 million bpd in June, Reuters reported on Thursday, quoting a source familiar with the data.
Last month, Russia and OPEC’s largest producer and de facto leader Saudi Arabia managed to get OPEC and their Moscow-led non-OPEC allies to agree to boost production by unspecified quotas for individual countries part of the pact, to ‘ease market and consumer anxiety’ over the high oil prices. According to Russian Energy Minister Alexander Novak, Russia’s share of the 1-million-bpd total OPEC/non-OPEC increase could be around 200,000 bpd.
Before the decision to reverse some of the cuts—or as OPEC and allies put it, to stick to 100-percent compliance rates—Russia’s pledge in the pact was to cut 300,000 bpd of its oil production from the October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million bpd.
Even before the OPEC and friends meeting, Russia had already started boosting its oil production, and had pumped as much as 11.09 million bpd in the first week of June—143,000 bpd above the country’s then-quota under the OPEC+ production cut deal.
Just before the meeting, all signs were pointing to Russia gearing up for a jump in its oil production, with plans for exports and refinery runs in the coming months indicating that Moscow was preparing to increase its oil production as early as this month.
Earlier this week, Russia’s Novak and his Saudi counterpart Khalid al-Falih discussed the latest developments on the oil market and exchanged information about their countries’ plans for production to meet summer demand, Russia’s energy ministry said in a statement. The decision to ease the combined OPEC/non-OPEC compliance rate from 147 percent in May 2018 to 100 percent starting July 1 equates to adding around 1 million bpd on the market, the statement said.