Moscow forecasts reductions in crude oil production of 9.3% this year and 9.8% in 2023 due to the partial embargo decreed by Brussels on Russian oil and oil derivatives, it was announced on Monday.
According to the new budget guidelines of the Russian government, Russia will produce 9.3% less this year (to 475.3 million tons) and 9.8% less next year (to 472.8 million tons).
In the draft budget, tax and tariff policy for 2023 and the periods 2024 and 2025, reported by the official TASS news agency, The reduction in crude oil production is also affected by discounts in the sales of Russia’s main export productsaccording to the Russian Ministry of Finance.
In 2021, Russian oil production reached 524 million tons and since the spring of 2021, Russia has been gradually increasing production due to OPEC+ (Organization of Petroleum-Producing Countries) alliance agreements. [OPEP] and 10 allies, including Russia).
But since last March, Russia has faced unprecedented international sanctions for its military campaign in Ukraine, which affect the logistics chain, finances, ship insurance and the ships themselves, which cannot dock in ports of the European Union (EU).
In addition, the EU decided at the leaders’ summit earlier this month ban the purchase, import, or transfer of oil and certain oil products from Russia by sea to the community block.
The Russian crude phase-out will take six months for crude oil and eight months for other refined oil products.
In the period 2024-2025, Russia will produce an average of 478 million tonsdepending on the source.
Russian Finance Minister Anton Siluanov said Russia could lose up to 17% of oil production by 2022 due to sanctions, although Deputy Prime Minister Alexander Novak said that after an April production drop of one million barrels per day, the indicators began to recover.
According to the Russian OPEC+ negotiator, in June there will be 600,000 barrels per day more than in May, and Russia is close to recovering the production levels of February.
Globally, according to Novak, Russia can produce 500 million tons of oil by 2022.
At the same time, the Finance Ministry predicts that oil and gas revenues in the 2022 Russian budget will rise 15.2% to 10.4 billion rubles ($183.389 million).
In 2023 revenue will fall to 9.1 billion rubles ($160.661 million) and in 2024 to 8.4 billion rubles ($148.122 million).
The price of Russian (Urals) oil at the end of 2022 will be $80.1 per barrel, and is expected to then start to decline and reach $61 in 2025, according to the Russian government.
At the same time, the Brent crude discount is now over $33 a barrel.
The Russian Ministry of Finance forecasts that as Europe replenishes Russian oil and redirects its supplies, the cost of the Urals will decline, projecting it to reach $71.4 per barrel in 2023, $66 in 2024 and $66 in 2025. a total of 61 dollars per barrel.
Source: Observadora
