Russia cuts oil production in July as part of agreement with OPEC+

August 3, 2017

Russia reduced oil production by 307,600 barrels per day in July 2017 compared with October 2016, Russian Minister of Energy Alexander Novak said.

“As of the end of July 2017, the reduction in oil production amounted to 307,600 barrels per day with respect to October 2016. Thus, Russia is fulfilling all its obligations to reduce production”, he said. Russia must maintain this approximate level of reduction until the end of March 2018 in accordance with an agreement between 24 OPEC and non-OPEC countries.

OPEC and non-OPEC countries signed a declaration on cooperation on 10 December 2016 in Vienna. The declaration envisaged 24 countries reducing production by 1.8 million barrels per day over six months. The declaration was extended for another nine months in late May.

During a meeting with Russian President Vladimir Putin on July 28, Novak reported on the results of the fourth meeting of the Ministerial Committee in charge of monitoring the implementation of the oil production reduction agreement of OPEC and non-OPEC countries and said that the agreement was fulfilled at a rate of 98% over first six months –the highest figure in the history of OPEC. “OPEC and non-OPEC countries noted significant progress in achieving the goals that were set within the framework of the agreement that was concluded. Since the start of 2017, we have seen a significant recovery in the oil market. As a result of joint actions, more than 350 million barrels of oil were removed from the market. If this had not been done, the oil surplus would have increased almost twofold compared to what existed before the deal. Instead of this negative scenario, the surplus of commodities decreased in the first half of the year and the level at which reserves exceeded the five-year average declined by more than a quarter over the past six months – from 340 million to 250 million barrels. We expect this trend to pick up in the third quarter of this year due to the seasonal factor”, Novak said.

The situation on the global oil market will continue to be discussed with the participation of leading experts as part of the ‘Global Energy: Challenges and Sustainable Development’ pillar at the first ‘Russian Energy Week’ International Forum.

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