Russia’s oil production fell in July, compensatory cuts looming

Russia’s crude oil production fell in July from June, Russia’s Energy Ministry said on Friday, with more cuts to come.

Russia’s oil output rose 67,000 bpd above quota for July, but fell in July compared to June due to “unique supply scheduling issues.” According to the Ministry of Energy, production levels in August and September will “fix this”.

Russia has already agreed to compensate for everything it has overproduced since April this year. Compensatory reductions will come in October and November this year, and from March to September next year, the Ministry said in a press release on Friday.

“Russia reaffirms its commitment to its compensation program, which was previously submitted to the OPEC Secretariat, and urges other OPEC Plus countries that have submitted their compensation plans to comply with them,” the Ministry said.

OPEC+ has struggled to get all its members to cut production to the target levels the group agreed in April, with chronic delays from the likes of Iraq, the United Arab Emirates, Kazakhstan and Russia dragging down the group’s performance. OPEC’s side of the OPEC+ group saw production fall slightly in July to 26.99 million barrels per day, a Bloomberg survey showed earlier this month, but Iran and Venezuela had the bulk of the cut and are exempt from production quotas.

OPEC is due to release its official production figures for July in the Monthly Oil Market Report on Monday.

OPEC’s Joint Ministerial Monitoring Committee said in a press release after its latest meeting that OPEC members achieved “generally high compliance” with production quotas in both May and June.

By Julianne Geiger for Oilprice.com

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