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Russia’s Oil Production Hits Highest In Five Months

Tsvetana Paraskova

Russia’s production of crude oil and condensate inched up to 11.28 million barrels per day (bpd) in January, up from 11.26 million bpd in December and the highest production level since August last year, data from the Russian energy ministry showed on Sunday.

According to energy ministry data, cited by Russian news agency Interfax, Russia slightly increased from December its oil and condensate production in January 2020, when deeper production cuts by OPEC and its Russia-led non-OPEC partners entered into force, at least for the first quarter of this year.

As per Reuters calculations of tons into barrels per day, total crude oil and condensate production rose in January, but no information has been released by Russia regarding what part of the January production was crude and how much was condensate.

Removing condensate from the level of compliance—a concession Russia won at the December OPEC+ meeting—makes Russia’s compliance record look more acceptable to OPEC’s leader and key partner in the deal, Saudi Arabia, which is pushing for all rogue producers in the pact to fall in line with their quotas.

The Russian energy ministry’s statistics do not break down yet crude oil and condensate production, but the ministry will regularly provide that breakdown to analysts, media, and OPEC, Russia’s Energy Minister Alexander Novak has said, according to Bloomberg.

Crude oil and condensate production in Russia hit a record high for the post-Soviet era in 2019, despite Moscow’s key role in supporting the ongoing OPEC+ production cuts. The new record oil production showed that one of the key parties to the OPEC+ deal, and certainly the key party in the non-OPEC camp of producers in the agreement, did not comply with its share of the cuts for most of 2019.

While Russia’s compliance with the deal in January 2020 remains a difficult task to calculate due to the condensate production, OPEC’s crude oil production in January dipped to more than a decade low, with Saudi Arabia and its Gulf Arab allies over-complying with the cuts, and Libya’s oil supply falling due to the ongoing port blockade, the monthly Reuters poll showed on Friday.

By Tsvetana Paraskova for Oilprice.com

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