Russia’s oil output rises by in June to 1.46 mln tonnes per...

Russia’s oil output rises by in June to 1.46 mln tonnes per day

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Russia’s oil output rises by in June to 1.46 mln tonnes per day

The average daily output of oil and gas condensate in Russia from June 1 to June 29, 2022, amounted to 1.461 mln tonnes, increasing by 4.7% compared to May, when the average daily production was 1.395 mln tonnes, a source familiar with official statistics told TASS.

Since the spring of 2021, Russia has mostly gradually increased oil production, but in March 2022, it faced comprehensive international sanctions due to the situation in Ukraine. Thus, restrictions prohibit investments in the exploration, production, and processing of crude oil in Russia. In the first half of April, the decline in production compared to March was 6%, and by the end of the month it reached around 9%. Russian Finance Minister Anton Siluanov said that Russia could lose up to 17% of oil production in 2022 due to sanctions.

The government expects to partially restore oil production after its fall in April at about 1 mln barrels per day. He also noted that in mid-June there was an increase in production by 600,000 barrels per day compared to May and Russia was close to recovering the February level of production. However, it can not be ruled out that by the end of 2022, production could drop to 500 mln tonnes from 524 mln tonnes in 2021.

Russia is reducing production as part of the OPEC+ agreement, but from the beginning of 2021 it was able to increase production as part of a gradual easing of restrictions. So, in January 2021, the agreements allowed Russia to increase oil production by 125,000 barrels per day (bpd), in February-April – by another 130,000 bpd per month, in May -July – by another 38,000 barrels per day bpd per month. In August-December, Russia increased production at the level of about 100,000 bpd per month in accordance with the agreements in OPEC+.

The OPEC+ countries on the other hand decided to jointly increase oil production in August by 648,000 barrels per day, Russian Deputy Prime Minister Alexander Novak said in an interview with Rossiya 24 TV channel.

Thus, OPEC+ did not change the parameters of the agreement approved last month for August.

“The decisions that were made today include increasing production jointly by 24 countries by 648,000 barrels per day in August,” Novak said.

Russia almost restored oil production in June to February figures after the dip in March-April 2022, he added. “Our production recovered against the drop in March-April, and we almost reached the February level in June. We produced 10.2 mln barrels daily at that time, lowered [production] to about 9 mln barrels per day in March-April. Now, in June, we already have 9.9 [mln barrels daily] in average,” Novak said.

Russia will be able to increase oil production to the level of its OPEC+ quota, the Deputy Prime Minister said. “I am confident we will support the recovery and quotas provided to Russia to ensure rebalancing of supply and demand during the summer season also,” he added.