Russia is preparing to export less oil in August

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Russia could deliver on at least part of its pledge to reduce oil exports next month as its western ports are planned to ship up to 200,000 barrels per day (bpd) lower crude volumes in August compared to July, Reuters reported exclusively on Friday, quoting sources with knowledge of the export plans.

Russia said last week that it would cut its crude oil exports by 500,000 bpd in August in a bid to ensure a balanced market, and the reduction in exports would come from a further 500,000-bpd cut in oil production.

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This week, Russia’s energy authorities asked the top executives of local companies to plan for export cuts in August, according to Reuters’ sources.

The western ports in Russia, Primorsk and Ust-Luga on the Baltic Sea and Novorossiisk on the Black Sea, are expected to ship 100,000 bpd-200,000 bpd lower volumes in August. The export programs for the Far Eastern ports in Russia, from which crude cargoes make much shorter trips to Asian customers China and India, are not available yet, according to Reuters.

But the reduction in the export plans for the western ports in August suggests that Russia would make good on its pledge to reduce shipments, at least partially, as Moscow and Saudi Arabia announced cuts to exports and production, respectively, for August nearly simultaneously last week.

Signs have emerged that Russian crude oil exports have already started to fall in recent weeks.

Tanker-tracking data monitored by Bloomberg showed earlier this week that Russian crude oil exports by sea dropped by 205,000 bpd to 3.21 million bpd on a four-week average basis in the four weeks to July 9. The latest four-week average export volumes fell below the 3.38 million bpd in the four weeks to February 26, after holding up above that level for months.