Russia’s Energy Ministry said that the nation’s oil-output cuts almost reached the targeted level in April, according to people familiar with the figures.
(Bloomberg) — Russia’s Energy Ministry said that the nation’s oil-output cuts almost reached the targeted level in April, according to people familiar with the figures.
The Kremlin pledged to cut crude production by 500,000 barrels a day in March and maintain it through to December in retaliation for Western restrictions, which include a price cap imposed by the Group of Seven industrialized nations.
Yet so far, crude flows from ports have shown little evidence of the output cuts.
The Energy Ministry’s data show the country pumped a daily average of 1.319 million tons of crude in April, the people said, asking not to be identified because the figures aren’t public.
That’s equivalent to 9.67 million barrels a day, based on a 7.33-barrels-per-ton conversion rate. It puts production at 443,000 barrels a day lower than in February, the baseline for the cuts, according to Bloomberg calculations.
Russia classified its oil statistics last year due to their “sensitive” nature amid sanctions against its economy, making it difficult to assess the implementation of its production pledges beyond the assurances of energy officials.
Oil market watchers have been closely monitoring the country’s seaborne crude exports and supplies to domestic refineries to understand whether the nation has been following through on its promises.
“We can see the reductions in overall numbers, in terms of refining and overall exports,” First Deputy Energy Minister Pavel Sorokin said.
Russia is fully committed to the voluntary crude output adjustments announced previously, and the reductions exceeded 400,000 barrels a day on average in April, he said.
Seaborne Exports
Yet, the country’s four-week average seaborne shipments rose in the period to May 5 to the highest since Bloomberg began tracking them in detail at the start of 2022.
Pipeline flows to Europe, which are exempted from an import ban, fell sharply earlier this year before Russia said it would cut production. They were down just 7,000 barrels a day in March from February.
Volumes of crude being processed in the country’s refineries declined 1.4% in April from the previous month amid seasonal maintenance, according to data seen by Bloomberg.
Russian officials have also given differing statements about the February baseline for the country’s production cut.
Deputy Prime Minister Alexander Novak had said earlier that crude production in that month was 10.2 million barrels a day, according to Interfax, while Bloomberg calculations based on industry data put the level at around 10.1 million barrels a day.
On Wednesday, Sorokin said the February baseline, according to secondary sources data, “if I’m not mistaken, was 9.83 to 9.84 million barrels a day.”
The Energy Ministry said that the nation’s total production of crude oil and condensate in April averaged 1.45 million tons a day, the people said, which is equivalent to 10.63 million barrels a day.
That compares with 11.1 million barrels a day in February, according to Bloomberg calculations.
(Updates with comments in the fifth and ninth paragraphs.)
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