Russia increased its oil production in March amid a more generous Opec+ quota, even as rising coronavirus cases threaten oil demand in the short-term.
The nation pumped 43.34 million tonnes of crude and condensate last month, according to preliminary data from the energy ministry’s CDU-TEK unit. That equates to 10.249 million barrels per day, based on 7.33 barrel-per-tonne conversion ratio, or 1.3 per cent more than in February.
The CDU-TEK doesn’t provide a breakdown between crude and condensate – a light oil extracted from natural gas, which is excluded from the Opec+ deal, and it’s difficult to assess Russia’s compliance. If March condensate output was in line with February’s, then daily crude-only output would be around 9.41 million bpd, some 165,000 barrels above than its Opec+ quota.
From February to April, Russia and its neighbour Kazakhstan are the only two nations allowed to pump more under the agreement between the Organisation of Petroleum Exporting Countries and its partners. Russia’s quota rose by 65,000 bpd in March, having increased by the same amount in February, and will grow another 130,000 bpd in April. Saudi Arabia voluntarily took 1 million bpd from the market.
Opec+ reached a deal on Thursday to gradually increase production from May to July, adding a total of more than two million barrels a day to global supplies, with the agreed ramp-up schedule still subject to monthly revisions. Included in that is the phased rollback of Saudi Arabia’s voluntary cut over the next three months.
Even though Europe is toughening its lockdowns amid a third wave of coronavirus, data from the US and Asia support the alliance’s decision to return the barrels to the market.
Russia is set to increase its output “evenly” by a total 114,000 bpd in May-July, according to Deputy Prime Minister Alexander Novak. This will allow the nation to reach its output quota under the original Opec+ schedule established last year.