Russia slightly increased its oil production in July, ahead of OPEC+ plans to start easing their record supply cuts starting this month.
The nation’s producers pumped 39.63 million tons of crude and condensate last month, according to preliminary data from the Energy Ministry’s CDU-TEK unit. That’s an average daily of 9.371 million barrels, applying a 7.33 barrel-per-ton conversion rate, and is above June levels, when output averaged 9.329 million barrels a day.
The Organization of Petroleum Exporting Countries and its allies last month agreed to start tapering their cutbacks from 9.6 million barrels a day in July to 7.7 million from August 1. The group led by Saudi Arabia and Russia will be returning supply at a time oil’s recovery has faltered with coronavirus infections still surging in many parts of the world, and new cases emerging in Asia and Europe.
Russia, often a laggard in previous OPEC+ deals, showed nearly full compliance in May and June. The nation’s crude oil output target for May-July was 8.5 million barrels a day, excluding condensate. The CDU-TEK doesn’t provide a breakdown, but if condensate production was at the same level as in May, then crude-only supply reached 8.571 million barrels a day in July.
Starting August, Russian producers can increase crude oil output by 500,000 barrels a day to 8.99 million a day. Not all of that may end up in international markets as the Energy Ministry advised oil companies to process additional August output domestically to satisfy growing demand for fuel.