Oil prices rise following Russia’s announcement of a reduction in daily output by 500,000 barrels

On February 10, 2023, Deputy Prime Minister Alexander Novak announced that Russia will decrease its oil production by 500,000 barrels per day in March. This reduction comes in response to the recent Western sanctions on Moscow’s crude oil and oil products.

According to the International Energy Agency, Russia’s crude oil output was 9.77 million barrels per day in December, making this cut equivalent to 5% of its total production.

Alexander Novak stated that the reduction will help to stabilize market relations. He also emphasized that this cut does not affect gas condensate and will be based on actual output levels, not Russia’s quota under the OPEC+ agreement.

It is worth noting that this decision was not made in collaboration with the OPEC+ coalition, of which Moscow holds a co-chair position. While members of OPEC+ usually have to reach a consensus on output policies, the group has previously allowed voluntary actions that align with existing output agreements. This Russian decline builds upon the previous OPEC+ decision to lower production by 2 million barrels per day, which was agreed in October of last year.