Putin’s Russia shocks Global Oil Markets

Putin’s Russia shocks Global Oil Markets

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The Brent crude price jumped to $90 a barrel after Moscow announced reducing of global supplies for the rest of the year

Russia will extend its voluntary cut in oil exports by 300,000 barrels per day (bpd) until the end of the year, Deputy Prime Minister Aleksandr Novak announced on Tuesday.

“The additional voluntary reduction in oil supplies for export is aimed at strengthening the precautionary measures taken by the OPEC+ countries in order to maintain stability and balance on the oil markets,” the official stated.

Russia will review its voluntary cuts monthly, in order “to consider the possibility of deepening the reduction or increasing production, depending on the situation on the world market,” Novak added.

Russia to Cut Oil Production in Response to Western Sanctions. Prices suddenly Jump

The measure was taken “in addition to the voluntary reduction previously announced by Russia in April 2023, which will last until the end of December 2024,” the deputy prime minister explained.

The world’s second largest oil producer has been cutting oil output and exports in lockstep with fellow heavyweight oil nation Saudi Arabia. In a separate statement on Tuesday, Riyadh extended its voluntary production cut of 1 million barrels per day until the end of the year, the SPA news agency said, citing an energy ministry official.

read more: Saudi Arabia extends oil-production cut

The latest round of oil cuts comes on top of voluntary reductions of 1.66 million bpd that some OPEC+ members had first declared in April, and then agreed to extend until the end of 2024.    The reductions are described as voluntary because they are outside the official policy of OPEC+, which obliges every non-exempt member to a share of production quotas. 

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OPEC+, a group comprising the Organization of the Petroleum Exporting Countries and allies including Russia, which pumps around 40% of the world’s oil, has been cutting output since November 2022.

Prices of the international benchmark Brent blend jumped above $90 per barrel on the news for the first time since November 2022.

Originally published by Russia Today

All links to previous Gospa News articles have been added aftermath


Russian oil exceeds Western Price Cap

Russia’s flagship Urals crude averaged $74 per barrel last month, above the $60 price cap set by the EU and G7 countries in an attempt to curtail Moscow’s oil revenues.

According to data released by the Russian Finance Ministry on Friday, the price was higher than the July average of $64.37 per barrel and slightly down from what it fetched in August 2022. To compare, the average price of the Brent crude benchmark was $86.20 per barrel in August.

read more: Western firms ignoring G7’s Russian oil ‘price cap’ – Bloomberg 

The price cap on Russian oil imposed by the EU, G7, and allied countries last December prohibits Western shipping, insurance, and re-insurance companies from handling Russian cargoes unless they are sold at or below the set price. A similar restriction was introduced in February for exports of Russian petroleum products.

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Moscow has responded to the restrictions by outlawing the sale of oil and refined products to buyers that comply with the cap. 

August was the second consecutive month in which the average price of Russia’s Urals topped the $60 price since the mechanism was implemented, according to the data. India and China emerged as key buyers of Russian crude after Moscow redirected shipments away from the West in response to the sanctions.

Russian Oil Affairs Growing in Arab and Asian Countries thanks to Western Sanctions

Meanwhile, Bloomberg reported that exports of Russian oil using Western-insured tankers were continuing despite the fact that the price of the Urals grade had jumped above the $60 per-barrel limit.

According to the news agency, about 40% of vessels carrying crude from Russia’s Baltic and Black Sea ports were either owned or insured by companies based in countries that had agreed to support the price cap.

Originally published by Russia Today

All links to previous Gospa News articles have been added aftermath


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