Russia to cut oil output by 500,000 bpd

Marcus Amudipe
Marcus Amudipe
An aerial view shows Vladimir Arsenyev tanker at the Kozmino crude oil terminal on the shore of Nakhodka Bay near the port city of Nakhodka, Russia August 12, 2022. REUTERS/Tatiana Meel/File Photo


By Christian George

Russia is hoping to reduce its oil production by 500,000 barrels per day in March.

Deputy Prime Minister Alexander Novak said on Friday after an imposed price caps on its oil as well as oil products.

Reuters reported that the price of Brent crude rose on the news of the output cut from Russia, the world’s second-largest oil exporter after Saudi Arabia, increasing by more than 2.5% on the day to $86.6 per barrel.

“As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the ‘price cap’.

“In this regard, Russia will voluntarily reduce production by 500,000 barrels per day in March. This will contribute to the restoration of market relations,” Novak said in a statement.

The G7, the European Union and Australia had agreed to stop the use of Western-supplied maritime insurance, finance and brokering for seaborne Russian oil priced above $60 per barrel from Dec. 5 as part of Western sanctions on Moscow over the conflict in Ukraine.

EU had set price caps from February 5 which has forced Russia to ban deals involving any application of the price cap mechanisms.

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