Rising oil prices: Russia announces major production cuts
Notable increases of more than 2 percent in the oil. The barrel of West Texas Intermediate hit $80, while crude oil Brentthe European benchmark, hit $86.5 after RThe European Union has announced a significant reduction in its production from March..
As announced by alexander NovakRussian Deputy Prime Minister, the world’s second largest exporter of crude oil after Saudi Arabia. Russia will cut production by 500,000 barrels a day from March. in response to the Western sanctions accepted by the G7, Australia and the European Union..
“As of today, we are selling in full the entire volume of oil produced, however, as indicated above, we will not sell oil to those who directly or indirectly adhere to price cap principles. In this regard, Russia will voluntarily reduce its production by 500,000 barrels per day in March. This will contribute to the restoration of market relations.“, underlined Novak in a statement reported by Reuters.
During the last quarter, the Western partners agreed to impose a $60 a barrel for Russian crude oil, which came into effect on December 5.. These measures are aimed at weakening Moscow’s economic power and reducing the number of jobs. undermine its economic ability to continue the invasion of Ukraine.who will be one year old on February 24.
The European Union reached a later agreement due to reluctance from Poland and the Baltic countries, but it reached an agreement to set the purchase price for Russian crude oil at 57 euros on December 2. Likewise, The 27 agreed on a corrective mechanism and banned the purchase of Russian oil from 5th February.. At the same time, Russia has banned exports to countries applying similar measures. there considered imposing a “floor price” on its oil..
“Russia considers the mechanism of “maximum prices” in the sale of Russian oil and oil products. is an interference in market relations and the continuation of the destructive energy policy of the countries of the Western collective.“, Novak said.
The last major drop in Russian oil production occurred in April, when fell by almost 9% following the introduction of Western sanctions by Ukraine.. Since then, Russia has succeeded in establishing other agreements for the sale of oil.mainly in Asia and China.
Russia’s decision to cut oil production comes nine days after the Organization of the Petroleum Exporting Countries and its allies (OPEC+).of which Russia is a member, will support the current production policy of the group of oil producers, leaving in place the production cuts agreed last year..
On the other hand, the latest data on oil inventories in the United States have sounded the alarm about a possible slowdown in the world’s largest economy, as crude inventories have reached their highest level since June 2021. time, Saudi Arabia has decided to raise official prices for crude oil sales to Asia.as a sign of demand recovery in China.