Russia refuses to use stocks to boost oil production

Russian Minister of Energy Alexander Novak told reporters Friday in Johannesburg that his country does not use tank stocks to boost oil production. Having enough inventory to influence the crude market

Three sources in the sector told Reuters in July that Russia had used oil tank stocks to help boost crude supply in June , Supply elasticity with Saudi pressure on producers Two more to increase spare capacity.

Russia has some flexibility because of the excess capacity of the transnext pipeline system and oil tankers in the fields, the sources said.

Novak added, "Of course, Transenft has its own oil storage facility … but we certainly do not have a large storage capacity to control the market."

The minister pointed out that Russia does not have the storage capacity to accumulate reserves, adding that such a project will require significant investments that may not achieve an economic return.

Russian oil production increased by about 100,000 barrels a day last month compared to May. The country's oil production averaged 11.215 million bpd between July 1 and July 15, an increase of 245,000 bpd from May, according to two industry sources.

Novak said that Russia has increased production by increasing oil supply rather than using stocks.

On world oil prices, Novak said the market remains unstable and responds to verbal interventions. But current oil prices have taken into account the risks of US sanctions on Iran.

The Organization of Petroleum Exporting Countries (OPEC) and other crude oil producers led by Russia agreed last month to ease restrictions on production.

The agreement increases the combined oil production of one million barrels a day, and Russia's share in this increase to 200,000 barrels a day.

Novak said that OPEC and independent producers are not currently discussing an option to increase production by more than a million barrels a day. Novak had previously said that Russia and other major producers could increase production if the market was hit by a shortage of supply.