Russia to stick with voluntary oil export cuts until year-end

Russia will stick to its voluntary oil exports cuts through 2023 in a move to balance the oil market, according to Deputy Prime Minister Alexander Novak.

The nation will continue with a policy of curbing overseas supplies of crude and oil products by 300,000 barrels a day until the end of December, Novak said in a statement on Sunday.

Moscow’s statement about its commitment to cuts, which it had pledged to enact together with its OPEC+ ally Saudi Arabia, comes as Russia’s oil flows exceeded the targeted level. The alliance is set to gather later this month to discuss the policy.

The voluntary cut “comes to reinforce the measures made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” Novak said.

The decision was widely expected after crude fell for a second straight week and the risk premium on oil from the Israel-Hamas war vanished. Novak said in early August that Moscow would prolong export restrictions at a reduced level of 300,000 barrels a day below their May-June average until the end of the year.

The policy will be reviewed next month, when Russia will consider deepening the cut or increasing production, Novak said. Russia’s export curbs come on top of a voluntary reduction in output of 500,000 barrels a day from March through 2024 in response to Western sanctions, in particular the G-7 price cap on nation’s crude and products.