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Russian oil exports outside ex-Soviet nations to be cut by 0.7 per cent in Q1

Russian oil exports

Russian oil exports to markets outside the former Soviet Union will fall, however, overall supply will increase by 200,000 b/d. Bashneft photo.

Total Russian oil exports will rise 5 per cent from 2016 Q4

By Vladimir Soldatkin and Olga Yagova

MOSCOW, Dec 20 (Reuters) – Russian oil exports to markets outside the former Soviet Union (FSU) will be cut by 0.7 per cent in January-March from the fourth quarter of 2016, pipeline company Transneft said on Tuesday, as Moscow prepares to reduce output as part of a global pact.

However, overall supply, which includes non-Russian oil transit from Azerbaijan and Kazakhstan as well as deliveries to Belarus, will increase by 200,000 barrels per day (b/d), as reported last week.

Russia is set to cut oil output by 200,000 b/d in the first quarter, after which cuts will reach 300,000 b/d as agreed this month with leading producers in the OPEC group.

Oil exports to countries outside the FSU will total 50.98 million tonnes in January-March, down from 51.36 million tonnes planned for the fourth quarter, Russia’s Transneft said.

It said exports to neighbouring Belarus, a former Soviet republic, would rise to 4.5 million tonnes in the first quarter from 3 million tonnes in the previous three months.

According to Reuters calculations, total Russian oil exports will reach 61.1 million tonnes in the first quarter, up 5 per cent from October-December.

Exports are seen rising via the Black Sea port of Novorossiisk in the first quarter by 1.3 million tonnes, while supplies from Baltic Sea outlets will decline by 800,000 tonnes, according to an export schedule.

Transneft and the Energy Ministry said the export schedule reflected planned allocations and that actual volumes exported might differ.

The export increases do not necessarily mean Moscow will fail to meet its commitments under the deal. Some analysts, however, are sceptical that Russia will honour its pledges.

Vienna-based JBC Energy has said its 2017 production forecast for Russia, Kazakhstan and Azerbaijan is just 100,000 b/d lower after the deal, far less than they should cut in the first half of 2017.

Russian Energy Minister Alexander Novak has said Russia will reduce production from an upwardly revised October 2016 level of 11.247 million b/d, the country’s highest post-Soviet output.

That commitment is part of the first such deal between the Organization of the Petroleum Exporting Countries and Russia since 2001, when Moscow agreed to cut oil exports by 150,000 b/d. It later reneged on that promise due to rising oil prices.

(Editing by David Clarke and Dale Hudson)

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