Russia significantly cuts oil production in July, nears OPEC+ quota

The data was provided to the agency by sources familiar with the Russian Ministry of Energy's information, who spoke on the condition of anonymity because the information is not public.

Russia, the largest producer of crude oil in OPEC+, has also been one of the main laggards in the group regarding the implementation of the supply agreement intended to support global prices. Moscow has promised to make additional cuts at the end of this year and next year to compensate for overproduction. These compensatory restrictions, which were also to be implemented by Iraq and Kazakhstan, were the focus of the OPEC+ ministerial monitoring meeting last week.

Last month, the Russian Ministry of Energy promised that Russia would "resolve the overproduction issue in July and will fully meet its requirements."

Russia’s mandatory production limits for July were set at 971,000 barrels per day.

Russia classified official oil production data

Russia classified official oil production data amid Western sanctions due to the Kremlin's war against Ukraine, leaving oil market observers with only a few indicators - marine oil exports and domestic refineries - to track industry trends.

Earlier this year, Moscow also changed the method of providing data used for OPEC+ production assessments, making it harder to independently assess the country’s compliance with production cuts. The Ministry of Energy now reports data in barrels per day and apparently uses a ton-to-barrel ratio at the lower end of traditional conversion factors used by analysts for Russian crude oil.

It should be noted that last month, Russian oil exports from major western ports fell to the lowest level in almost 20 months. The most noticeable reduction was in supplies to China.

On August 5, oil prices fell to a seven-month low due to rising tensions in the Middle East.