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Moscow announced that it will reduce its oil production by 500,000 barrels per day in March, a decision that it did not consult with the Organization of the Petroleum Exporting Countries, and its allies, led by Russia (OPEC+), and that comes as a retaliation for the sanctions. from the West to its crude oil. The news puts pressure on hydrocarbon prices, while the oil coalition said it will not boost production to make up for Russian cuts.
Half a million barrels of oil less per day and may be many more in the coming months, according to the Kremlin.
“As of today, we are fully selling the entire volume of oil produced, however, as stated above, we will not sell oil to those who directly or indirectly adhere to the ‘price cap’ principles. In this regard, Russia will reduce voluntarily production at 500,000 barrels per day in March. This will contribute to the restoration of market relations,” said Alexander Novak, Russia’s deputy prime minister.
Moscow’s decision was made without the consent of OPEC+, because according to some members of the club of oil-exporting countries, Russia did not consult before making the decision; although the Kremlin said it had held talks with some members of the coalition.
As part of the sanctions package over the war in Ukraine, the G7, the European Union (EU) and Australia have agreed to ban the use of Western-provided marine insurance, financing and brokerage for Russian oil that is transported by sea at a higher price. at 60 dollars per barrel, a measure that began to apply on December 5.
The EU also imposed a ban on purchases of Russian oil products and set maximum prices. Russia, for its part, prohibited agreements involving any application of the price cap.
Two delegates from the oil coalition told the Reuters news agency that OPEC+ does not plan to increase daily barrel production to offset the cuts announced by Moscow.
Meanwhile, UK Brent crude and US West Texas Intermediate (WTI) futures rallied more than $2 early in the session on Friday and were close to posting weekly gains of more than 8%.
With Reuters and AP
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