Oil and gas condensate production in Russia last year increased by 2.5% to 547.499 million tons (10.965 million bbl. / day) compared to 2015, reported Interfax, citing data from CDU TEK. This is a new record. Thus, 2016 was a leap year with one day more than usual. In December, the average daily production amounted to 11.208 million barrels.

The production was increased by Rosneft: by 0.3% to 189.7 million tonnes; Bashneft (in October 2016, 60.16% of its ordinary shares were bought by Rosneft): by 7% to 21.4 million tonnes; Surgutneftegaz: by 0.4% to 61.8 million tons; Gazprom oil: by 9.2% to 37.8 million tons; Tatneft: by 5.2% to 28.68 million tons. Lukoil has reduced production by 3.2% to 83 million tonnes, RussNeft: by 5.4% to 7 million tons.

According to CDU TEK, the oil exports to far abroad rose by 7% to 235.8 million tons; to the CIS countries (only Belarus) fell by 20.3% to 18.14 million tons. The Russian oil exports have been decreasing since 2009, but the trend was reversed at the end of 2015, when there was a sharp increase of 9% to 243 million tons. It means, exports as a whole grew by another 4.4% to 254 million tonnes in 2016. At the same time deliveries to Russian refineries increased only by 0.8% to 284.3 million tons in 2016. Because of the tax maneuver the refining margins decreased, and the export of Russian oil has become more profitable, explains a senior analyst of Aton, Alexander Kornilov.

But from January 1, Russian companies will have to cut oil production. In November last year, OPEC agreed to reduce output by 1.2 million barrels to 32.5 million barrels per day from January 1, 2017. Later Russia and 10 other countries outside the cartel joined the agreement. They will cut production by 560,000 barrels, Russia itself - by 300,000 barrels daily in the first half of the year. The production cuts will be calculated on the October level. At the end of last year, Russian companies have stated that they would reduce production. The representative of Rosneft does not comment on whether the company has started to reduce production from January 1. Representatives of other Russian companies did not respond to requests on Sunday.

Saudi Arabia (provides a third of OPEC production) since the new year cut oil production by at least 486,000 bbl. / day in comparison with October 2016, reported The Wall Street Journal, citing a source. Kuwait has reduced production by 130 000 barrels / day, Oman - by 45,000 barrels / day. Kuwait suspends operation of 80-90 oil wells, the head of Kuwait Oil Co., Jamal Jaafar, informed. His words were cited by the newspaper Al-Anba (according to Interfax). Iraq intends to reduce production due to less production of heavy oil and medium density oil, said the country's oil minister Ali al-Jabar Lyaibi.

From the moment of agreement on the decrese in production, Brent has risen by almost 12% to $57.1 per 1 barrel by 6 January (maximum since July 2015). At the same time last year it fell below $30 per 1 barrel. Reduction of production by OPEC non-member countries has changed the mood of the market, but so far the oil is in standby mode, Bloomberg quoted Michael Tran of RBC Capital Markets as saying. According to him, now the market is looking for evidence of compliance with the agreements, prices may go slower.

The first figures for the extraction will be announced early next month in the publications by Bloomberg, Thomson Reuters and Platts. The International Energy Agency and the US Energy Information Administration will provide this information one or two weeks later. OPEC will publish data no sooner than mid-February. But to control the production of small manufacturers, such as South Sudan and Equatorial Guinea, will be difficult, Bloomberg writes. It is expected that the committee monitoring production cuts will meet on 21-22 January in Vienna.

Arrangements for reduced production are only for the first half of this year. For the entire 2017 compared to 2016, oil production in Russia will increase slightly, but will not fall, as said in an interview to Vedomosti the Russian Deputy Prime Minister, Arkady Dvorkovich. In view of the planned reduction in the first half of 2017, there will likely be a growth in 2017, but more modest than in 2016, agrees Kornilov.

Dvorkovich does not expect full compliance with the agreements. "Today's prices incorporate the understanding that the commitments will be executed, but unlikely in their entirety. Otherwise, prices would most likely be closer to $60 per 1 barre," he noted.