Page 105 - RusRPTOct23

would be the largest reduction in inventories since at least 2007," the agency said. Saudi Arabia's strategy, a reduction in global oil supply by 300,000 barrels per day, which Russia supports, leads to new inflationary pressure. This quarter, OPEC countries produced an average of 27.4 million barrels per day, about 1.8 million less than consumers need. If OPEC maintains its stated production volume, the gap between supply and demand will almost double in the fourth quarter.
Ukrainian control over a set of gas and oil drilling platforms in the Black Sea has serious consequences for Russia's ability to manoeuvre in the area, the Ukrainian Navy told Suspilne on September 12. The loss of control over the platforms "is a security issue" for Russia, according to Dmytro Pletenchuk, the spokesperson for the Ukrainian Navy. Ukraine's Military Intelligence announced on September 11 that Ukraine had regained control over the platforms, informally known to Ukrainians as the Boyko Towers, named after pro-Russian politician Yuriy Boyko, as well as two mobile rigs. The drilling platforms were procured by Ukraine when Boyko served as energy minister under then-President Viktor Yanukovych. Russia occupied the rigs following the 2014 illegal annexation of Crimea.
The market was caught off guard on September 6. Traders expected the Saudis to extend its unilateral 1mn barrel-a-day output cut by a month into October, but Riyadh announced a three-month rollover instead. Oil popped above $90 in London for the first time since November. The move was coordinated with Russia, which promised to extend its own 300,000 barrel-a-day export reduction for the same length of time. While the market can be certain Saudi Arabia will make good on its promises, there will be skepticism about the Kremlin’s commitment. Nevertheless, the move underscored the strength of the alliance between Riyadh and Moscow.
Russia will prolong its voluntary oil output cut, currently at 300,000 barrels per day (bpd), until the end of the year, Deputy Prime Minister Alexander Novak said on September 5. "Russia will prolong the additional voluntary reduction of oil supplies to the global markets by 300,000 bpd until the end of December 2023," Novak said. The reduction will be revised monthly depending on the global oil market situation, Novak said. The measure is additional to Russia's oil output cut stipulated in April 2023, which is to last until 2025. Newswire SPA reported that Saudi Arabia would prolong the output cut that started in July until the year end with the reduction standing at 1mn bpd.
The outlook for 2024 demand growth among leading forecasters diverges widely, ranging from 1mn b/d to 2.3mn b/d. Mainly as a result of these divergent demand forecasts, there is a lack of consensus on global balances in 2024. China’s demand for 2023 remains a vexing data point even after seven months of the year have past — and also impact 2024.
105 RUSSIA Country Report October 2023 www.intellinews.com