Russia Shifts to Lower Gear for Second Half

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Russia’s oil industry appears to have settled into a new mode for the second half of the year, one emphasizing economy at the wellhead, fewer barrels for export and resilience in the downstream. Moscow has largely fulfilled its pledge — at first unilateral, and later to Opec-plus — to reduce crude oil output by 500,000 barrels per day: Energy Intelligence’s preliminary assessment shows that July production was 9.52 million b/d, down 460,000 b/d from February, the base for the cut. EI estimations meet official statements from Moscow — Deputy Prime Minister Alexander Novak said last week that Russia's output is stable at some 9.5 million b/d. In this belt-tightening phase, the priority will be high-margin fields. Producers will pump as much as possible at tax-incentivized reservoirs and greenfield investments while cutting activity at low-margin fields. Energy Intelligence currently forecasts that Russia’s crude production in July-December will level off at around 9.5 million b/d, with gas condensate adding another 1 million-1.1 million b/d, as Moscow fulfills its commitment to Opec-plus.

Oil Supply, Opec-Plus Supply , Oil Prices, Crude Oil, Refining
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