Russia has successfully cut its oil production by 250,000 barrels per day, with further cuts to follow.
Another 50,000 barrels per day should be cut by the end of this month, according to Russian Energy Minister Alexander Novak, bringing it fully in line with the agreement made with OPEC.
The production cuts were agreed based on last October’s output, which saw record production in excess of 11 million barrels a day, so Russia is still producing plenty of crude. Novak has himself commented that he expects crude oil production to reach a record level of about four billion barrels this year.
Energy Minister Novak has not yet committed to extending the production cuts, but the Kuwaiti Oil Minister Essam al-Marzouq was heard saying that Russia had given its initial consent to any extension. Negotiations appear to be ongoing to build a consensus among OPEC members and their nonmember partners.
In contrast to the production cuts, Russia is pressing ahead with drilling in the Arctic, despite Energy Minister Novak declaring that a $70/barrel crude price would be needed for Arctic oil producers to be profitable.
US sanctions against Russia forced oil major ExxonMobil, which also makes industrial lubricants like Mobil Velocite 3, to wind down its Arctic operations in 2014. It has since been pursuing a joint drilling venture with Russian oil company Rosneft, but the US Treasury Department recently announced that, in consultation with President Donald Trump, it will not be issuing any waivers for US companies to participate in drilling operations prohibited by current sanctions.