Despite the fact that Russia is cutting its oil production as part of OPEC and allies’ deal to restrict global oil supply, Moscow’s average daily crude oil production inched up again in 2017, to a 30-year-high of 10.98 million bpd, according to Russian Energy Ministry data.
Non-OPEC Russia, like OPEC’s de facto leader Saudi Arabia and most of the other cartel members, entered the joint deal on January 1, 2017 at a very high level of production, which took much of the sting out of the cuts. In the last quarter of 2016, Russia’s production had hit a post-Soviet era high, while year over year in 2016, production grew to 10.96 million bpd, from 10.72 million bpd in 2015.
Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from the October 2016 level, which was the country’s highest monthly production in almost 30 years--11.247 million bpd.
Moscow’s commitment to the deal, however, included a gradual reduction until reaching the 300,000-bpd cut by the spring of 2017, so for a few months in early 2017, Russia’s monthly production was above 11 million bpd.
Russia’s oil production in December 2017 was 10.95 million bpd, up from 10.94 million bpd in November, driven by 0.2-percent growth in production at the biggest oil firm, Rosneft. Related: U.S. Shale Can’t Offset Record-Low Oil Discoveries
For the whole of 2017, Russia’s average annual oil production increased for a ninth year in a row.
To compare, in 1999, the average annual oil production in the country was 6.1 million bpd.
The Russia-led non-OPEC producers and OPEC agreed at the end of November to extend their production cut pact to the end of 2018, in their efforts to continue drawing down the global oil overhang. If the deal holds until the end of this year, Russia’s oil production growth could stall, considering its commitment to the pact.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- The Biggest Oil Story Of 2017
- Higher Oil Prices Slow China’s Crude Stockpiling
- U.S. Rig Count Falls Slightly As Canada’s Rig Count Tanks