Russia Announces Slashing Oil Production by 700,000 Bpd in March

Emmanuel Addeh in Abuja

Russia says it slashed oil production by 700,000 barrels a day in March, far more than originally planned, according to Bloomberg.

That is a bigger reduction than the 500,000 barrels a day that the country pledged to cut originally.

The reduced output comes as the Organisation of Petroleum Exporting Countries (OPEC) pledged production curbs of 1.1 million barrels a day starting in May.

However, Bloomberg said the data sows doubt over how much oil Russia actually produced, as it didn’t align with the country’s seaborne exports and domestic refinery supplies.

In February, Russia announced plans to cut 500,000 barrels a day of its crude oil production throughout March, in retaliation to Western sanctions and energy price caps over its invasion of Ukraine.

After already extending the reduction to June, Russia’s Deputy Prime Minister Alexander Novak announced that the output cuts would be continued to the end of the year.

On the back of his comments — as well as news that OPEC+ would also be cutting its oil output by 1.1 million barrels a day — oil markets rallied, indicating the potential for crude prices to return to $100 a barrel this year.

The collective reduction in the commodity’s supply may also cause future volatility and force Western nations to reassess the $60 price cap on Russian oil.

OPEC nations pursued the cutbacks following a momentary drop in oil prices during March’s banking turmoil and fears of a recession that could hurt energy demand.