MOSCOW: Russia will cut oil exports to markets outside the former Soviet Union (FSU) by 0.7 percent in January-March from the fourth quarter of 2016, pipeline company Transneft said on Tuesday, as Moscow prepares to reduce output as part of a global pact. However, overall supply, which includes non-Russian oil transit from Azerbaijan and Kazakhstan as well as deliveries to Belarus, will increase by 200,000 barrels per day (bpd), as reported last week.
Russia is set to cut oil output by 200,000 bpd in the first quarter, after which cuts will reach 300,000 bpd as agreed this month with leading producers in the OPEC group. Oil exports to countries outside the FSU will total 50.98 million tonnes in January-March, down from 51.36 million tonnes planned for the fourth quarter, Russia’s Transneft said. It said exports to neighbouring Belarus, a former Soviet republic, would rise to 4.5 million tonnes in the first quarter from 3 million tonnes in the previous three months. According to Reuters calculations, total Russian oil exports will reach 61.1 million tonnes in the first quarter, up 5 percent from October-December. Exports are seen rising via the Black Sea port of Novorossiisk in the first quarter by 1.3 million tonnes, while supplies from Baltic Sea outlets will decline by 800,000 tonnes, according to an export schedule.
Transneft and the Energy Ministry said the export schedule reflected planned allocations and that actual volumes exported might differ. The export increases do not necessarily mean Moscow will fail to meet its commitments under the deal. Some analysts, however, are sceptical that Russia will honour its pledges. Vienna-based JBC Energy has said its 2017 production forecast for Russia, Kazakhstan and Azerbaijan is just 100,000 bpd lower after the deal, far less than they should cut in the first half of 2017. Russian Energy Minister Alexander Novak has said Russia will reduce production from an upwardly revised October 2016 level of 11.247 million bpd, the country’s highest post-Soviet output. That commitment is part of the first such deal between the Organization of the Petroleum Exporting Countries and Russia since 2001, when Moscow agreed to cut oil exports by 150,000 bpd. It later reneged on that promise due to rising oil prices.
