Russia’s oil production nears record high
Russia’s oil production in August stood at 11.21 million bpd, according to data by its energy ministry emailed to Bloomberg over the weekend.
After the OPEC meeting in June decided to ease compliance rates, Russia opened the spigots in July and pumped at its highest level since the OPEC/non-OPEC agreement came into force in January 2017. At 11.215 million bpd, Russia’s oil production in July was very close to the post-Soviet record-high of October 2016, the month used as a baseline for the production cuts.
Russia’s oil production in July had surged by 148,000 bpd from June, according to government data.
Before the decision to reverse some of the cuts—or as OPEC and its Moscow-led allies put it, to stick to 100-percent compliance rates—Russia’s pledge in the pact was to cut 300,000 bpd of its oil production from the October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million bpd.
Production in July was just 40,540 bpd lower than the October 2016 level.
In August, production was little changed from July, but Russian producers benefited from the record level of oil in rubles after the Russian currency significantly weakened due to new US sanctions and expectations for more sanctions coming, and a sell-off across the emerging markets and currencies after the Turkish crisis.
Last month, all major Russian oil firms—including the two biggest companies Rosneft and Lukoil—increased their production compared to July, but the rise was offset by declines of smaller producers and foreign company-led projects under production sharing agreements (PSA) such as the ExxonMobil-operated Sakhalin-1.
Saudi Arabia, Russia’s key partner in the production cuts pact, will report to OPEC that its crude oil production rose to 10.424 million bpd in August, S&P Global Platts reported on Friday, quoting an OPEC source.