According to a forecast released by the Russian Ministry of Energy, Russia’s oil output may fall by 0.1% in 2017 to 547 m tonnes. The Russian Federation’s compliance with its obligations to cut production will offset the crude output growth potential accumulated by the beginning of 2017.
Production was up 1.8% year-on-year in January 2017, only to register at +0.8% for 7M17, while, for the full year, Russia’s output of crude and gas condensate might drop by 0.1%, the Ministry of Energy said. The country last saw its output fall (by 0.6%) in the crisis-ridden year of 2008.
Figure. Accrued oil output in 2016–2017, m tonnes
Source: CDU TEK data
As its output declines, Russia has been cutting oil exports, too. Exports to non-CIS countries fell by 7%, or approximately 51,000 bpd, in June and July from October of last year. If this trend continues, the decrease will reach 0.4% in 2017 after a 7% growth posted in 2016.
The voluntary reduction in output began in November last year as a result of a deal made by OPEC and other producers. They decided to cut production by 1.8 mn bpd from the October 2016 level. Russia’s quota is 300,000 bpd. The key objective of the agreement is to reduce global oil inventories to a five-year average.
Oil production cuts will feature on the agenda of the Russian Energy Week. Government officials, Russian and international business executives and industry experts will take part in the discussion.