Russian crude production drops but still does not comply with OPEC pact

Russian crude

Russia’s oil production stood at 11.34 million barrels per day in February, down by 75,000 bpd from October levels, which is the baseline for the global pact. However, it did not meet the target set, according to data published by the Energy Minister on Saturday.

This figure is compared to the 11.38 million bpd from January. Expressed in tons, oil production reached 43,303 million from 48,113 million in January.

This production data was in line with what a source told Reuters on Friday.

Major oil companies decrease production

All major Russian oil companies have lowered their activities. Lukoil, the country’s largest firm in this sector, and Rosneft, reduced their monthly activities by 0.6 and 0.5 percent, respectively.

Gazprom Neft’s production, Gazprom’s oil division, fell by 1.9 percent last month.

Pipeline exports accounted for about 4,480 million barrels per day in February from the 4,313 million barrels per day seen in January.

OPEC wants to lower production

The Organization of Petroleum Exporting Countries (OPEC) and other producers led by Russia agreed to reduce their combined oil production by 1.2 million bpd as of January 1 in order to balance the market.

For its part, Russia agreed to cut production by 228,000 bpd from October 2018, the baseline for this pact, back when its production hit 11.41 million bpd.

The bloc pledged to reduce production by 800,000 million barrels per day from January, while allies agreed to cut an additional 400,000 million, as Iraqi oil minister Thamer Ghadgban stated after the two-day OPEC summit in Vienna.

The deal should be approved in a meeting between non-OPEC producers this Friday. Most ministers are confident that it will be approved without fuss.

The U.S. seeking lower prices

OPEC Secretary General Mohammed Barkindo stated that Donald Trump is welcome to join the dialogue to balance supply and demand in the global oil market.

The United States plays a strategic role in global supply and demand, Barkindo said in Riyadh in late-February.

The U.S. leader has been critical of the OPEC and has sought to make pressure so that the organization cannot increase crude prices worldwide.

Trump took to Twitter to express his concern, saying “Oil prices getting too high. OPEC, please relax and take it easy.”

“World cannot take a price hike - fragile!” he added.

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