Russian Deputy Prime Minister Alexander Novak unveiled Moscow’s plan to reduce oil exports by 500,000 barrels per day (bpd) in August.
The statement issued by the Russian government’s website on Monday subsequently led to an increase in oil prices.
“As part of efforts to ensure that the oil market remains balanced, Russia will voluntarily reduce its oil supply in the month of August by 500,000 barrels per day, by cutting its exports by that quantity to global markets,” Novak said in the statement.
In April, Russia agreed to extend its 500,000 bpd oil production cut until the end of this year.
Moscow first announced the reduction in February, in response to the introduction of price caps by the West.
In addition to Russia, several OPEC and non-OPEC oil producers, known as OPEC+, also announced voluntary production cuts. These nations include Kazakhstan, Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, Oman, Algeria and Gabon.
The biggest oil-exporting countries declared an additional reduction of around 1.66 million bpd in oil production, which was set to take effect from May until the end of this year. OPEC+ pumps about 40 percent of the world’s crude.
Meanwhile, Saudi Arabia, the world’s largest exporter of crude oil, said it would extend its voluntary cut of one million bpd at least until the end of August. The Kingdom had initially planned the cuts until July.
The Gulf state first announced its one-million barrel cut during the June meeting, where Riyadh also said it would extend a production cut of 500,000 bpd — first announced in April — to the end of next year. The cuts will reduce Saudi Arabia’s total oil output to nine million barrels per day.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the Saudi Press Agency quoted an official source in the Ministry of Energy as saying Monday.
The announcements made by major oil exporters regarding production cuts have led to an increase in oil prices. As a result, Brent crude, the global oil benchmark, saw a rise of 0.6 percent, equivalent to 43 cents at $75.84 a barrel after gaining 0.8 per cent on June 30. Similarly, US West Texas Intermediate crude experienced a 0.7 percent increase, or 48 cents reaching $71.12 per barrel.