Russia will cut oil output by 500,000 b/d in March, Russian Deputy Prime Minister Alexander Novak said on Friday. The news follows the G7 price cap as well as western countries' bans on Moscow's crude oil and petroleum products respectively implemented in December and February.
The cut, equivalent to 5% of Russian output, is about 0.5% of world supply.
“We will not sell oil to those who directly or indirectly adhere to the principles of the price ceiling,” Alexander Novak said in a statement. “In relation to this, Russia will voluntarily reduce production by 500,000 b/d in March. This will contribute to the restoration of market relations.”
Novak noted that the production cut doesn’t apply to gas condensate and will be calculated based on actual production levels rather than Russia's quota in the OPEC+ production deal. Russia’s decision was made without consultation with the OPEC+ alliance.
The Brent crude contract for April delivery was trading at $86/bbl, up nearly 3% from Thursday's close. The front-month NYMEX WTI contract expiring in March was at $79.03/bbl, up 1.2% from its last settlement.