July 1, 2019 / 10:41 AM / 21 days ago

Russia cut June oil output by more than required in global pact

MOSCOW (Reuters) - Russia reduced oil production in June by more than the amount agreed in a global deal to cut output, the energy minister and industry sources said on Monday, as the sector still felt the impact of a contaminated crude crisis that crippled exports.

FILE PHOTO: An oil platform operated by Lukoil company is seen at the Korchagina oil field in Caspian Sea, Russia October 17, 2018. REUTERS/Maxim Shemetov/File Photo

Russian Energy Minister Alexander Novak said that Russian oil output last month fell by 278,000 barrels per day (bpd) from an October 2018 baseline of 11.41 mln bpd, Russian news agencies reported, indicating output in June of about 11.13 million bpd.

Under a deal reached with OPEC and other oil producers, Russia had agreed to reduce output by 228,000 bpd from the October 2018 baseline, indicating it should keep total output around the 11.17 million-11.18 million bpd level.

Production had fallen much further in May to 11.11 million bpd, after contaminated oil was discovered in Russia’s Druzhba pipeline network in April that led to the suspension of exports via the system that supplies crude to Europe and beyond.

Oil supplies via the pipeline, which feeds export routes supplying the Baltic port of Ust-Luga, central Europe and Germany, have resumed since then but not in full.

Russia’s output of 11.11 million bpd in May was its lowest since June 2018 and compares to 11.23 million bpd in April.

Industry sources had earlier told Reuters that oil production was 11.15 million bpd in May, a figure reached by converting output in tonnes to barrels per day. Reuters uses a barrel-to-tonne ratio of 7,33:1.

Official data on June oil production in Russia is expected to be released on Tuesday.

The Organization of the Petroleum Exporting Countries, Russia and others are gathering in Vienna on Monday and Tuesday to discuss the pact that expired on June 30.

OPEC and its allies look set to extend supply cuts at least until the end of 2019 as Iran joined top producers Saudi Arabia, Iraq and Russia in endorsing a policy aimed at propping up the price of crude amid a weakening global economy.

Reporting by Olesya Astakhova and Gleb Gorodyankin; additional reporting by Gabrielle Tétrault-Farber; Writing by Vladimir Soldatkin; Editing by Susan Fenton and Edmund Blair

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