Novak announced a voluntary reduction in oil production

Russia will cut oil production in March by 500,000 barrels per day, Deputy Prime Minister Alexander Novak said. According to him, this step will contribute to the restoration of market relations.

“Russia will voluntarily cut production by 500,000 bpd in March. This will contribute to the restoration of market relations,” Novak said.

The Deputy Prime Minister noted that today Russia fully sells the entire volume of oil produced.

Novak today also informedthat the risks of a decline in oil production in Russia in 2023 remain. According to him, the government will evaluate them in the near future.

Earlier, the Deputy Prime Minister noted that despite the embargo imposed in January, Russia was able to maintain the level of oil production at the level of November-December 2022, it amounted to approximately 9.8-9.9 million barrels per day. According to him, the Russian oil industry will continue work stably.

Since December 5, 2022, the oil price ceiling introduced by the G7 countries (G7, includes the UK, Germany, Italy, Canada, USA, France, Japan) and the European Union (EU) has been in effect. It is set at $60/bbl.

Later, they set a limit on export prices for expensive oil products from Russia (for example, diesel) at $100/bbl, and for cheaper ones (fuel oil) at $45/bbl, the restrictions came into force simultaneously with the ban on offshore deliveries of oil products from Russia in the EU on February 5th.

In response to these restrictions, Russian President Vladimir Putin signed a retaliatory decree on December 27, 2022, according to which Russia will not supply oil if the contracts explicitly or implicitly provide for a price cap mechanism. It is emphasized that this measure is applied at all stages of deliveries to the final buyer. The document entered into force on February 1.