The Russian Energy Ministry has told domestic oil producers to reduce oil output by about 20% from their average February levels, Bloomberg reported on Monday citing two sources with knowledge of the matter.
The amount would bring Moscow in line with its commitment under a global deal with OPEC. The oil cartel and other large oil producers led by Russia, a group known as Opec+, agreed to cut their combined oil output by 9.7-million barrels per day (bpd) in May and June to combat oversupply triggered by the coronavirus crisis.
With other countries, such as the U.S. and Norway, which are not a party to the OPEC+ deal, the reduction in total global oil output could be 20-million bpd, or a fifth of the world’s oil production.
Under the deal, Moscow has to cut its oil production by 2.5-million bpd from May, using the reference level of 11-million bpd — the figure that includes crude oil only and exempts gas condensate, a type of light oil.
Russia, where output of a gas condensate stands at 600,000-700,000 bpd, does not give breakdown for production of oil and gas condensate. In February, the combined output stood at 11.29-million bpd.
The energy ministry and leading oil producers did not immediately respond to requests for comment. Export volumes, unlike production, have not been limited by the global deal.
Vagit Alekperov, head of Russia’s number two oil producer, Lukoil, told Interfax the company would reduce its output by 40,000 tonnes per day (290,000 bpd).
Russian companies have significantly revised down their plans for oil exports in May following the global oil output cut deal by Opec+, three company sources and two traders told Reuters on Thursday.
So far in April, oil and gas condensate production in Russia stood at 11.27-million bpd, an energy industry source said, down from 11.29-million bpd on average last month.