12 December 2018, News Wires — Russia plans to cut its oil output by at least 50,000 to 60,000 barrels per day (bpd) in January, its energy minister said on Tuesday, less than its final target under a global production deal reached last week, aiming for gradual, smooth reductions.
This would mean Russian oil output coming in at around 11.35 million bpd next month, off the post Soviet-record high of 11.41 million bpd reached in October and down from 11.37 million bpd last month.
Energy Minister Alexander Novak reiterated to reporters that the country planned to cut its oil output gradually.
“We will see how the situation would evolve,” added Novak, who is a part of Russian Prime Minister Dmitry Medvedev’s delegation to the Arctic Yamal peninsula where local gas producer Novatek is expanding liquefied natural gas production.
The Organization of the Petroleum Exporting Countries and some non-OPEC producers including Russia last week said they would curb oil output by a combined 1.2 million bpd.
They are looking to prop up oil prices that plummeted below $60 per barrel from a four-year high above $85 hit in October on oversupply worries.
Of that, Russia undertook to cut 228,000 bpd.
According to the initial agreement between OPEC and other producers, reached in late 2016, Russia also had to gradually cut its oil production, by 300,000 bpd from 11.247 million bpd reached in October that year.
“It was not that gradual two years ago, there were jumps (in output reduction) in January because of the weather. We will watch and monitor,” Novak said.
Kirill Dmitriev, the head of the Russian Direct Investment Fund, welcomed last-week deal, saying it is conducive with “strengthening of Russia’s macroeconomic stability”.
