Market Data Suggest Russia Isn’t Cutting Oil Production As Promised

Oil shipments out of Russia haven’t dropped in recent months despite the Russian pledge to cut production by 500,000 barrels per day (bpd) from March onwards, a Bloomberg analysis of shipping data showed on Friday.

The most recent tanker-tracking data suggest that instead of falling, Russian crude oil exports by sea are rising.

The average four-week crude shipments from Russian export terminals increased for a sixth consecutive week in the week to May 19, according to tanker-tracking data reported by Bloomberg’s Julian Lee.

Russia’s crude oil exports averaged in the four weeks nearly 4 million bpd, up by 15% compared to the shipments in the first week of April. The four-week average volume of exports was the highest since Bloomberg started monitoring Russian crude shipments in detail at the beginning of 2022 when Russia invaded Ukraine.

Russia has said that the 500,000 bpd cuts will now extend until the end of 2023, but crude oil export data in recent weeks do not reflect any cuts—on the contrary, Russian crude oil exports by sea are rising.

Earlier this month, reports emerged that Russian Deputy Energy Minister Pavel Sorokin sought to convince Western analysts in a rare call that Russia is indeed reducing its oil production by 500,000 bpd.

But last week, the International Energy Agency (IEA) said that Russia had failed so far to cut its oil production by 500,000 bpd as promised, and it may even be looking to boost output to compensate for lost revenues.

Russian crude oil and oil product exports continue to prove resilient, with exports hitting in April the highest level since the invasion of Ukraine, at 8.3 million bpd, the IEA said in its closely-watched Oil Market Report.

“By our estimates, Moscow did not deliver its announced 500 kb/d supply cut in full. Indeed, Russia may be boosting volumes to make up for lost revenue,” the IEA said.