Russia has announced new crude production and export cuts in a potential sign of growing sanctions pressure, analysts said.
Opec+ countries announced the continuation of a 2.2m barrels-per-day decrease into the second quarter of the year, as it seeks to bolster crude prices above $80 a barrel.
But Russia’s additional combined cut of 471,000 bpd of production and export barrels was seen as a surprise.
The cuts were in addition to those of 500,000 bpd announced in April, which are due to continue until the end of this year.
“This additional voluntary cut comes to reinforce the precautionary efforts made by Opec+ countries, with the aim of supporting the stability and balance of oil markets,” Russian Deputy Prime Minister Alexander Novak said on Sunday.
He said that Russia would gradually look to ease the export cuts. More crude has become available for export because of reduced refinery output, in part from Ukraine’s drone attacks on Russia’s facilities.
Fearnley Securities said the cuts may be a sign of “sanctions enforcement pressure [on] Russian exports” after measures announced last month by G7 countries targeting tanker operators.
“There was a surprise from Russia,” UBS analyst Giovanni Staunovo said, according to Reuters.
Vortexa said the exodus of Western operators from Russian trades and sanctions imposed on Turkish and United Arab Emirates-based companies could cause a tonnage shortage for the Urals trade.
An average of 20 tankers a month have left the trade in Urals since July 2023, when the price burst through the $60 a barrel price cap imposed by the G7 countries led by the US, Vortexa said.
Urals was trading above $74 a barrel on Monday, according to US-based Trading Economics. It means Western operators and insurers would breach sanctions for hauling crude at that level.
Urals still trades at a discount from Brent, which was up slightly at $83.68 a barrel on Monday.
The crisis in the Red Sea has kept oil prices high this year despite concerns about the state of the global economy.
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