Russian Deputy Prime Minister Alexander Novak said on Mar. 21 that Russia is close to completing the plan to reduce crude oil production by 500,000 b/d in March and will reach the target production level within a few days. Taking into account the current market situation, Russia decided to keep the reduced output until the end of June.
Novak gave no details of the planned production cuts but said Russia would not accept any external restrictions that posed "significant risks for the energy security of the whole world."
On Feb. 10, Russia announced that it would voluntarily cut production in March in response to the price cap imposed by the West. At that time, the Russian statement said that the price cap was an intervention in market relations and Russia’s output cut would contribute to restoration of market relations.
Crude oil futures had just come off 15-month lows before Novak announced the production cut extension. As the banking crisis in Europe and the US exacerbated the market's worries about economic recession, it dampened the outlook for oil market demand.