Since Russia was threatened to be boycotted by the western, Russia plans to cut its oil production output by 500,000 barrels a day in March. This movement caused sharp increasing oil prices.
Regarding the Russian announcement, Oil Market has been turmoiled causing disruption to the Russian demand. It further tightens supply constraints from OPEC+, which Saudi Arabia had already led into a 2 million barrel-a-day production cut last year in an effort to buoy prices. Delegates from the group signaled they won’t take any action to fill in the gap created by Russia.
Russia’s reduction is equivalent to about 5% of its January output. The Kremlin has repeatedly hinted at such a move since the European Union and the Group of Seven industrialized countries began discussing capping the price of Russian crude and refined product exports amid the war in Ukraine.
“Russia believes that the mechanism of price caps on Russian oil and petroleum products is an intervention in market relations and an extension of destructive energy policies of the collective West,” Deputy Prime Minister Alexander Novak said in a statement. His press service confirmed that crude output will be affected by the cuts.
By Ashley Jones