Russian oil output falls near to OPEC+ target - sources

MOSCOW (Reuters) - Russia’s oil output in the first five days of May fell to 8.75 million barrels per day (bpd), close to its production target of 8.5 million bpd for May and June under a global deal to cut crude supplies, two sources familiar with the data told Reuters.

FILE PHOTO: Pump jacks are seen at the Ashalchinskoye oil field owned by Russia's oil producer Tatneft near Almetyevsk, in the Republic of Tatarstan, Russia, July 27, 2017. Picture taken July 27, 2017. REUTERS/Sergei Karpukhin

Together with gas condensate, or light oil, which is not part of Russia’s target, the country’s output was 9.5 million bpd for May 1-5, the first time it has fallen below 10 million bpd since August 2009.

While the latest data, which showed production of 1.296 million tonnes per day including gas condensate, was only for the first few days since the deal kicked in on May 1, it shows Russia is following through on its pledges so far.

Russia’s Deputy Energy Minister Pavel Sorokin said in an online interview that domestic oil producers are striving to reach the target as soon as possible.

He also said that the global oil demand declined by around 30% last month and the fall has eased since then. However recovery to pre-crisis levels would not be achieved quickly.

Sorokin added that some countries, where international majors work, may have difficulties with sticking to targets under a global oil output cuts deal.

He didn’t named those countries. Traders and industry sources said that Iraq has yet to inform its regular oil buyers of cuts to its exports, suggesting it is struggling to fully implement the cuts deal.

Reuters uses a ratio of 7.33 barrels per tonne to calculate the daily output in barrels. Russia’s gas condensate output is typically about 700,000-800,000 barrels a day. <O/RUS1>

A group of leading oil producers known as OPEC+ including Russia and Saudi Arabia agreed last month to cut crude supplies to combat the fallout from the coronavirus, which has hit economic activity and demand for fuel around the world.

Under the global pact, Russia has pledged to reduce its crude oil output in May and June by 2.5 million bpd from a baseline of 11 million bpd. In April, the month before the deal came into force, Russia produced an average 11.35 million bpd.

Last month, oil prices fell to their lowest in more than two decades due to the slide in demand during the pandemic combined with overproduction and a lack of crude storage capacity.

Prices have since recovered slightly as some countries end coronavirus lockdowns and producers curb their supply. [O/R]

Russia’s average monthly oil and gas condensate output fell to 9.97 million bpd in August 2009 but then remained above 10 million bpd until this month, thanks to new fields coming online such as Vankor, operated by energy giant Rosneft.

Reporting by Olesya Astakhova Gleb Gorodyankin; writing by Vladimir Soldatkin; Editing by Louise Heavens and David Clarke