Despite President Vladimir Putin’s claims that Russia has cut oil production, there is little evidence of this outside of the country, according to Bloomberg analysis. Meanwhile, shipments of Russian crude oil beyond the country increased by 480,000 barrels a day between late May and late February with only external flows of refined products declining because of the ongoing fall in demand caused by the Covid-19 pandemic. Analysts caution that it is possible the time it takes to transport crude oil to refineries and process it may create a significant lag between the implementation of a production cut and its subsequent impact.
For Russia’s allies in the OPEC+ group, which have pledged to reduce their own production to stabilise oil prices, the lack of cuts is likely to be frustrating. The figures are important since Russian officials have said seaborne crude oil flows have been aided by a diversion of barrels previously pipelined to several European countries. However, the numbers show that these pipeline flows had already collapsed before the production cut took effect. The lack of cuts could threaten the basis of the OPEC+ alliance, whereby the group was supposed to balance the oil market by adjusting production to match demand.
Tags: Putin,russian oil,russian oil ban,russian sanctions