Russia breaches oil production cuts in May and June
In August this year, Russia will have to deepen oil production cuts in order to meet its quota under the OPEC+ agreement. As it turned out, the country failed to fulfill its output obligations for the months of May and June.
However, Russia is not the only country on this list. In total, five countries failed to discharge their duties to reduce oil production, including Iraq, Nigeria, Angola, and Kazakhstan. These oil-producers will have to make up for the overproduction in August. Otherwise, OPEC will impose sanctions against these countries.
Russia will have to cut output by extra 100,000 barrels per day. The country produced crude oil at a rate of 9.388 million barrels per day in May and 9.323 million barrels per day in June.
Under the OPEC+ agreement, Russia's daily quota level is 8.492 million barrels. Based on OPEC’s calculations, the country’s production above the quota for the two previous months is approximately 134,000 barrels. The situation is not critical at all.
Meanwhile, Iraq has been the worst violator of the deal. The country’s overproduction has been more than a half of its quota for the two previous months. However, the Iraqi authorities pledged to compensate for the two months of overproduction in August.
Overall, 23 countries signed the OPEC+ deal. Recently, the major oil exporters agreed to ease the daily output cuts to 7.7 million barrels per day starting in August from 9.7 million barrels per day set in the previous pact.