Russian Oil Output Begins Rapid Descent

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.

After having held firm in March, Russian output is beginning to slide fast and hard. Average production of crude oil and gas condensate in Apr. 1-19 was 10.1 million barrels per day, down nearly 9% from March levels, official data show. Crude output alone is down 900,000 b/d so far this month to 9.15 million b/d, according to Energy Intelligence’s estimate. Tellingly, on Apr. 19, crude and condensate production was 9.86 million b/d, which is a staggering 1.15 million b/d less than average output the previous month. At the current rate of decline of about 47,000 b/d, the country would even reach the pandemic nadir of 9.3 million b/d in June 2020. The fall in many ways mimics the one Russia witnessed two years ago when Covid-19 was galloping across the globe: Handicapped by a lack of storage, producers have no choice but to shut in wells. This time, however, Russian barrels are widely considered to be toxic by many buyers. Producers were able to prop up production in March thanks only to wild discounts to dated Brent — up to $40 per barrel for Urals. So long as the war continues, such generous discounts will be the only way Russia can keep exports near a lofty 5 million b/d.

Crude Oil, Oil Supply, Refining, Ukraine Crisis
Wanda Ad #2 (article footer)
Production and exports from Iran and Venezuela are rising amid speculation that the US may be taking a more lax approach to sanctions enforcement.
Thu, Sep 21, 2023
China's August oil demand picked up slightly from a five-month low in July. January-August oil demand rose 13% versus the same period of 2022.
Mon, Sep 25, 2023
A significant delay would have a fairly modest impact on spreads, as crude oil transportation capacity in Canada has expanded in recent years.
Thu, Sep 21, 2023