In response to the latest round of sanctions imposed by Western countries, Russia has announced that it will be cutting its oil output by 5%. The cut is expected to reduce the country’s oil production by 500,000 barrels per day in March.
The news has been welcomed by the oil markets, with oil prices set for a significant weekly gain on the news. Analysts believe that the production cut could lead to a tightening of supply, which could further drive up prices.
The sanctions have also had a knock-on effect on product tanker rates, with rates surging in the opening days of the EU’s latest Russia ban.
The sanctions have been imposed in response to Russia’s alleged involvement in the SolarWinds hack and the poisoning of opposition leader Alexei Navalny.
The news has been met with mixed reactions, with some countries expressing their support for the sanctions while others have voiced their opposition.
It remains to be seen how the sanctions will affect Russia’s economy in the long-term, but the production cut is sure to have an immediate impact on the global oil market.