The country's oil producers are trimming their oil production levels faster than expected, with the total amount of country-wide cuts already reaching 130,000 barrel per day.
Russia's Interfax reported that the country seems to be serious about its promise to deliver the biggest part of the oil production cuts from the group of non-OPEC producers. An Energy Ministry official, who asked not to be identified, told Interfax that individual oil producers had delivered the first production cuts during the first week of January.
"Russian companies voluntarily limited their production volumes as part of the deal between OPEC and non-OPEC countries. The process goes faster than expected and surpasses the initial "conservative" estimate of 50,000 barrel per day," he said.
According to the agreement made on December 10, non-OPEC producers promised to curb their production volumes by 558,000 bpd, with the largest portion of the cuts, about 300,000 bpd, coming from Russia. Over the last months, the country has been pumping oil at the levels of 11.25 million bpd, the highest since the Soviet times, explains Bloomberg.
This comes as a relief to the oil market as Russia does not have a good track record of complying with the agreements of this type. Being the largest producer in the non-OPEC group, also comes with an additional responsibility to serve as an example for smaller producers, some analysts said. Bloomberg adds that Kazakhstan, Russia's neighbouring country, also delivered 20,000 bpd in cuts in January. Together, the countries have already curbed the output in the region by 150,000 bpd, what makes up a quarter of the total amount for non-OPEC producers.
Previously, Russia's Energy Minister Aleksandr Novak said that the country planned to cut its output by 200,000 bpd by the end of Q1 and reach the total agreed amount of 300,000 bpd by May. So far, the largest OPEC producer, Saudi Arabia, has already limited its production volumes by as much as 486,000 bpd.
As of writing, Brent crude (NYMEX: XBR/USD) trades higher at $52.12.