Russia agrees on further OPEC+ oil-export cuts, Novak says

Russia has agreed with its OPEC+ partners on further cuts to its crude exports, Deputy Prime Minister Alexander Novak told President Vladimir Putin.

“We have agreed, but we’ll announce main parameters next week,” Novak said at a televised government meeting with Putin.  

Russia has pledged to curb its crude exports by 500,000 barrels a day in August, then taper the curbs to 300,000 barrels a day next month. On Wednesday, Novak said that Russia was discussing extending the September export reduction into October, according to media reports.

The statement from Russia, one of the two de-facto leaders of the Organization of Petroleum Exporting Countries and its allies, comes amid market expectations for Saudi Arabia to extend its 1 million barrel-a-day oil supply cut by one month into October. 

While global crude markets are tightening as demand climbs toward record levels, this summer’s price rally has stalled on mounting concern over economic growth in China. The pullback poses risks for Riyadh, which has seen its foreign reserves slump to the lowest since 2009.

Oil prices soared to a six-month high above $88 a barrel in London last month, but have since subsided as China — the biggest importer — contends with crises ranging from youth unemployment to turmoil in its property and shadow-banking industries.

Russia’s September export cuts will be measured against the average May to June level, Novak said earlier this week. While Novak didn’t provide a precise baseline figure, industry data seen by Bloomberg show that the country exported an average of 4.86 million barrels a day from May to June by sea and pipelines.