Russia is advocating a shift in the OPEC+ strategy once global crude oil recovers, calling for a focus on the OPEC+ market shares rather than on commercial oil inventories. The country expects relaxing lockdown measures in the United States, China and Europe to revive oil demand later in 2020 and wants to avoid the recovery to benefit to the United States, which are not part to the OPEC+ agreement.
In March 2020, Russia had rejected an OPEC+ proposal to cut global crude oil production by 1.5 mb/d, considering that it would benefit to large producers not subject to such agreements, such as the United States. The lack of agreement contributed to a collapse in crude oil prices, which were already falling due to the coronavirus outbreak that slashed global oil demand. Despite the OPEC+ decision in April 2020 to cut oil production by 9.7 mb/d in May-June 2020 and to continue production restrictions until April 2022, prices remained very low, well below the breakeven for many US shale oil producers that had to reduce production.
Russia, which agreed in April 2020 to cut its crude oil production from a baseline level of 11 mb/d to 8.5 mb/d in May-June 2020, expects its crude oil production to fall by around 15% in 2020, to 480-500 Mt, its first annual decline since 2008.