Russia half way to crude output cut target: Novak

Russia has implemented a little over half its promised contribution to the Opec and non-Opec production agreement, energy minister Alexander Novak said today.

Russian crude production has fallen by 160,000 b/d from the country's October baseline of 11.18mn b/d, Novak said.

Russia under the agreement with Opec committed to reduce its crude production in the first half of 2017 by 300,000 b/d, compared with the baseline. The Russian energy ministry said in December that 200,000 b/d of this reduction will take place in the first quarter. At that level, Russia's oil output should fall to just short of 11mn b/d in late March. Russia's output in February was 11.06mn b/d — 121,000 b/d below the October baseline and just 3,000 b/d below the January output level.

Taking Novak's statement today into consideration puts Russian production at 11.02mn b/d.

Novak today reiterated that Moscow will by the end of April fulfil the obligation it made to Opec, two months earlier than it had initially indicated. Russia is the mainstay of the non-Opec side of the agreement, struck in November, to collectively remove 1.8mn b/d from global supply in the first six months of this year. Kuwaiti oil minister Issam al-Marzouq last week put compliance with the agreement from within Opec at 95pc, but non-Opec compliance at just 50-60pc.

Also today, Russia's energy ministry said the country's crude and condensate production will increase by around 1pc by 2018-19 from this year's levels, to around 553mn t (around 11.06mn b/d).