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FNEB head Simonov appreciated OPEC+’s decision to extend the agreement until the end of 2025 – Rossiyskaya Gazeta

Date: July 12, 2024 Time: 17:34:12

There were no sensations; Alliance members chose a conservative scenario of action for the next year and a half. Many countries say they are already limiting production to the limit. And if the market prepares surprises, we may have to meet in emergency mode, says the expert.

It was previously known that some countries, including Russia, did not fulfill their obligations to reduce production, but are ready to compensate for this by reducing production in the future. In addition to Russia, among OPEC+ participants in April this year, Iraq, Kazakhstan, Kuwait, the United Arab Emirates and Gabon exceeded production.

The Russian Energy Ministry then reported that oil production in Russia was slightly above forecast levels in April. Overproduction is associated with the technical characteristics of a significant reduction in production. Russia plans to make up for shortfalls in production plans and will soon submit to the OPEC Secretariat its plan to cover a small deviation from voluntary production levels, the department stressed.

Under the terms of the OPEC+ agreement, Russia has an oil production quota of 9.95 barrels per day (b/d). But in March of last year, our country voluntarily committed to reducing production by another 500 thousand b/d. Starting in the second quarter of this year, it was decided to voluntarily add a reduction in production and exports of 471 thousand bpd. The distribution occurred as follows: in April, reduce production by 350 thousand b/d and exports by 121 thousand b/d. In May – by 400 thousand and 71 thousand b/d, respectively, and in June – to reduce production only by 471 thousand b/d.

According to Simonov, it is difficult for us to go from reducing exports and production to reducing only production. Plus, we need high oil prices. Reaching the expected level of oil and gas revenues entering the budget (they mainly depend on the volume of oil production – RG note) this year (11.5 trillion rubles) without increasing production is only possible by keeping oil prices at a high level. And it is very good that another leader of the agreement, Saudi Arabia, also needs high oil prices, the expert notes.

Our country’s official production quota is 9.95 million bpd, which is comfortable for our country; Today we produce less, says Simonov. But taking into account the voluntary production cuts, which since June have amounted to 971,000 bpd for Russia, we will have a hard time. With them we should reach 8.98 million bpd this month, the expert clarifies.

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Hansen Taylor
Hansen Taylor
Hansen Taylor is a full-time editor for ePrimefeed covering sports and movie news.

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