Russia will restrict oil exports by 500,000 barrels per day (bpd) in August, President Vladimir Putin’s oil spokesman said on Monday, as Moscow works with Saudi Arabia to raise global oil prices.
Brent crude oil LCOc1 rose as much as 1.6% to $76.60 a barrel on the Russian announcement and Saudi Arabia’s announcement that it would extend its voluntary output cut of 1 million bpd for another month to cover August.
“Within the efforts to ensure the oil market remains balanced, Russia will voluntarily reduce its oil supply in the month of August by 500,000 barrels per day by cutting its exports by that quantity to global markets,” Deputy Prime Minister Alexander Novak said.
The Russian announcement came only a few minutes after the Saudi announcement. The spokeswoman for Novak declined to clarify whether Russian oil output will fall by the same amount as exports.
Despite Western sanctions, Russia’s exports have remained strong. It has already committed to reducing output by 500,000 barrels per day (bpd) from March through the end of the year.
Russia is the world’s second largest oil exporter, trailing only Saudi Arabia, whose crown prince, Mohammed bin Salman, met with Putin on June 27.
Both Riyadh and Moscow have been attempting to keep oil prices high. Brent has fallen from $113 a barrel a year ago due to fears of an economic downturn and plentiful supplies from major producers.
Last month, Igor Sechin, CEO of Russian energy giant Rosneft ROSN.MM, stated that Russia was losing out to other OPEC+ countries because it exported a lower portion of its oil production.
According to Sechin, some OPEC+ countries sell as much as 90% of their output, whereas Russia exports only half of its supply.
Russian Urals URL-NWE-E, URL-E crude oil prices averaged $55.28 per barrel in June, down from $87.25 a year earlier and well below Western price caps, according to the finance ministry on Monday.
According to the government, the average Urals price for the first six months of the year was $52.17 a barrel, down from $84.09 in the same period last year.
