Oil prices rose on Friday after Russia announced plans to cut oil production by 500,000 barrels per day in March.
The cut is equivalent to about 5 percent of Russia’s oil production, reports said.
“Today, we are selling the entire volume of oil we produce, but, as we said before, we will not sell oil to those who directly or indirectly adhere to the ‘price cap’ principle,” Russian Deputy Prime Minister Alexander Novak , quoted by Reuters as saying in a statement.
“In this regard, Russia will voluntarily reduce production by 500,000 barrels per day or about 5% of output in March. This will contribute to restoring market relations,” said Mr. Novak.
Russia’s decision to cut production followed a few days later Organization of Petroleum Exporting Countries (OPEC) agreed to maintain planned monthly oil production.
OPEC and its allies in October last year agreed to cut oil production by 2 million barrels per day in November, the deepest cut by OPEC+ since the 2020 COVID pandemic.
The decision came despite pressure from the United States and others who argued that the group should increase output.
OPEC said it took the decision “due to the uncertainty surrounding the global economy and oil market prospects, and the need for long-term improvements to the oil market.”
The move was announced days after European Union (EU) sanctions on Russian oil were imposed in retaliation for Russia’s invasion of Ukraine.
In May last year, the EU announced plans to cut Russian oil imports as part of sanctions for Russia’s invasion of Ukraine.
Also read: Oil prices rise as OPEC holds back monthly output
Also, in December last year, the G7 countries, the European Union and Australia agreed to impose a price cap of $60 per barrel of Russian oil sent to other countries that have not imposed an embargo.
Russia is the world’s second largest exporter of crude oil, according to the International Energy Agency (IEA).
Price
On Friday, crude oil prices rose on news of production cuts from Russia.
Brent crude futures rose $1.71, or 2.02%, to $86.21 a barrel at 1148 GMT. U.S. West Texas Intermediate (WTI) crude oil prices rose $1.57, or 2.01%, to $79.63.
Both contracts rose more than $2 earlier in the session and are set for weekly gains above 8%, Reuters reported.
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