Officials in Moscow have reaffirmed Russia’s claims to be cutting oil production, amid continuing market scepticism about official data available on the country’s output.

Speaking at a briefing in Moscow on Wednesday, deputy prime minister Alexander Novak said total domestic oil and condensate production is averaging 10.34 million barrels per day, down 400,000 bpd from last year’s average.

In response to a G7-approved price cap for Russian oil export shipments that came into force in February, Moscow announced that it would instruct domestic oil producers to reduce output by 500,000 bpd, or about 5%, this year.

The US and Europe also imposed tough sanctions on Russian crude in the wake of Moscow’s decision to invade Ukraine in February last year.

The Russian output cut was scheduled to come into force on 1 March and continue until the end of December, but Western analysts have been unable to verify the figures with official data.

Quite contrary

A directors’ report by a regional investment vehicle in Russia’s oil province of Tatarstan, quoted by Moscow-based news agency Interfax, said that oil production in that region rose by almost 4% in the first quarter of this year against the same period of 2022.

Tatarstan hosts country’s fifth largest producer Tatneft that reported output of 550,000 bpd in 2021.

In March, Russian seaborne exports of Urals blend crude oil jumped 26% from February to over 2.6 million barrels per day, according to assessments of tanker traffic in the ports of Novorossiysk, Primorsk, Ust-Luga and Murmansk, according to Moscow-based industry journal Infotek.

The Paris-based International Energy Agency said Russian oil exports in March were at their highest since April 2020.

The March IEA report said Russian crude oil exports increased by 100,000 bpd to 5 million bpd, even though shipments to the European Union continued to decline.

The IEA report estimated that Russia’s oil export revenues, including products, rebounded by $1 billion from the previous month, to $12.7 billion, but were 43% lower than a year ago.

In another indication that oil production is not declining on promised levels, Russian statistics agency Rosstat reported on Wednesday that output of associated gas fell by just 1.3% to 26.4 billion cubic metres in the first quarter of this year, compared with the same period last year.

Rosstat withheld publication of the country’s oil and condensate production figures for the first quarter without any explanation.

Novak said that authorities have seen the discount on Urals shipped to India, China and other countries in Asia and Africa narrowing to about $26 to $27 per barrel against North Sea benchmark Brent from $40 to $50 per barrels seen shortly after the oil price cap mechanism was approval in December last year.

He said that the lesser discount will result in more tax revenues and help narrow the country’s budget deficit.