(Bloomberg) -- Russia’s average daily output in June stayed below its OPEC+ target for a second consecutive month as contamination in the Druzhba pipeline affected flows to Europe.
The country pumped 45.65 million tons of crude oil and condensate last month, according to preliminary data from the Energy Ministry’s CDU-TEK unit. That implies a daily average of 11.155 million barrels, based on the standard 7.33 barrels-per-ton conversion ratio, and it’s 35,000 barrels a day below the target set under the OPEC+ deal, according to Bloomberg calculations. Still, production was higher than in May as some Druzhba supplies resumed.
Russia, one of the architects of the OPEC+ deal to curb output in an effort to support oil prices, has taken the lead in extending the agreement. The Organization of Petroleum Exporting Countries on Monday plan to roll over the cuts for a further nine months. Allies including Russia are widely expected to endorse it when they meet in Vienna later on Tuesday.
Under the deal that expired at the end of June, the 24 countries in the OPEC+ alliance agreed to reduce oil output by 1.2 million barrels a day. Russia’s target was a daily reduction of 228,000 barrels from an October baseline level of 11.418 million barrels a day.
The nation was forced to cut production by as much as 400,000 barrels a day below the OPEC+ level in early June after flows into the massive Soviet-era link were contaminated with organic chlorides at the end of April. The impact on Russia’s production disappeared at the end of June, Energy Minister Alexander Novak said Monday.
Crude-pipeline operator Transneft PJSC has begun to “fully meet” shipment requests through the pipeline from July 1.
“We expect production and exports to gradually recover in June-August as the stock of contaminated crude oil is mixed with clean oil and exported,” analysts at Moody’s Investor Service, led by Denis Perevezentsev, said in an emailed note.
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