(Newsworthy.news) – Russia intends to reduce its production of crude oil to compensate for higher levels of pumping in this year’s warm seasons. Sources informed on the matter told reporters that the cuts in production are likely to be made by Moscow in Summer and early fall. The sources, who wished to remain anonymous as the information has not been made public, said the country would need more production of crude oil for home consumption during the cold seasons.
Russia reduced its production of crude oil by half a million barrels a day from March 2023, after Australia, the European Union and G7 nations announced a price cap on its oil products. Western countries had already introduced stricter oil sanctions on the country as the war continued in Ukraine. The sanctions were aimed at limiting the Kremlin’s oil revenue and therefore its ability to fund its war effort.
Studies in 2024 have shown that the reliance of China and India on Russia for oil is the main driving factor of the war in Ukraine. Russia was set to make roughly $180 billion from exports in 2023, a significant increase from the $110 billion it made in 2021.
Analysts have claimed that western efforts to set price caps on Russia’s oil exports have only resulted in Russia moving beyond the reach of international financial controls. Russia has overtaken Saudi Arabia as China’s main oil supplier, and India is relying on Russian oil to fuel its growth. India has also been refining some of the imported crude oil before selling it on to western countries.
Russia’s oil infrastructure also faces the prospect of bombardment by Ukrainian forces, particularly since Kyiv’s allies have given the go ahead for weapons they sent to Ukraine to be used against targets within Russian territory. Ukraine’s energy supply was hit severely by a Russian bombardment of its power grid in June, and Ukraine has been focusing on similarly strategic targets in Russia. In June Kyiv claimed to have struck three Russian oil refineries.
Russia is the biggest producer of crude oil in the Organization of Petroleum Exporting Countries, and global prices are heavily determined by Russian exports. Having exceeded its OPEC+ quota in the warmer months this year, Russia has committed to a compensation period that is expected to last through September 2025.
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