Russian Oil Output up Amid Generous OPEC+ Quota

Russia last month increased its oil production amid a more generous OPEC+ quota, even as increasing COVID-19 cases threaten oil demand in the short term.
The nation pumped 43.34 million tons (39.3 million metric tonnes) of crude and condensate last month, according to preliminary data from the Russian Energy Ministry’s CDU-TEK unit.
That equates to 10.249 million barrels a day, based on 7.33 barrel-per-ton conversion ratio, or 1.3 percent more than in February.
The CDU-TEK does not provide a breakdown between crude and condensate — a light oil extracted from natural gas, which is excluded from the OPEC+ deal, and it is difficult to assess Russia’s compliance.
If last month’s condensate output was in line with February’s, then daily crude-only output would be about 9.41 million barrels a day, about 165,000 barrels above than its OPEC+ quota.
From February to this month, Russia and its neighbor Kazakhstan are the only two nations allowed to pump more under the agreement between OPEC and its partners.
Russia’s quota rose by 65,000 barrels a day last month, having increased by the same amount in February, and would grow another 130,000 barrels a day this month.
Saudi Arabia voluntarily took 1 million barrels a day from the market.
OPEC+ on Thursday reached a deal to gradually increase production from next month to July, adding a total of more than 2 million barrels a day to global supplies, with the agreed ramp-up schedule still subject to monthly revisions.
Included in that is the phased rollback of Saudi Arabia’s voluntary cut over the next three months.
West Texas Intermediate for May delivery on Thursday rose US$2.29 to US$61.45 a barrel, up 5.7 percent for the week.
Brent crude oil for June delivery on Thursday rose US$2.12 to US$64.86 a barrel, adding 0.7 percent weekly.
Separately, US Secretary of the Interior Deb Haaland on Friday said US government program for selling drilling rights on federal land is so “fundamentally broken” that changes could be needed to address climate change, and ensure taxpayers get a greater value from extracted oil and gas.
“The American taxpayers deserve to have a return on their investment,” Haaland said, adding that the public lands managed by the US Department of the Interior are a shared asset.
“They don’t just belong to one sector or one industry. They belong to the outdoor economy, they belong to the kids who take their first breath, on a hike out on a trail,” Haaland told reporters.
“They belong to everyone, and it’s our job to make sure that every voice is heard with respect to how we manage those lands,” she said.
A week after taking office, US President Joe Biden ordered the department to pause selling new oil and gas leases on federal lands and waters while the agency studies possible requirements on any future sales — such as higher royalty payments, location restrictions and even limits on the number of tracts held by individual companies.
Although Haaland has repeatedly said that the leasing pause is temporary, it could take months or years to implement substantive changes — and the overhaul could have profound effects on energy development on public lands and waters now responsible for 22 percent of US oil production and 12 percent of the country’s natural gas.
The department is taking public comment on how to proceed through April 15, with plans to issue an interim analysis outlining recommended changes this summer.
That report “will wrestle with some fundamental questions about the oil and gas program, including whether it’s delivering a fair return to American taxpayers, whether it fairly accounts for the impacts of climate, whether there’s adequate opportunity for public input, including from Indian tribes, and whether we have the right mechanisms in place to avoid irreparable harm to wildlife, water, sacred sites and beyond,” Haaland said.
Some environmentalists have urged a permanent halt to the sale of drilling rights on federal land and waters.

About Parvin Faghfouri Azar

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