Russia’s energy ministry has delayed the publishing of official data for the country’s oil production for March, citing technical issues, yet reports in local media suggest that oil output fell last month for the first time since August 2021.
Russia pumped the equivalent of 11.01 million barrels per day (bpd) of crude oil and condensate in March, according to Bloomberg calculations based on a report in Russian news agency Interfax. That’s 0.6 percent lower than the production in February.
The decline in March was the first such drop since August 2021, when a fire at a Gazprom processing plant in West Siberia held back some condensate production.
A report from last week also suggested that Russian oil production inched down in March from February, signaling that OPEC’s key partner in the OPEC+ deal has failed to take advantage of its some 100,000-bpd monthly increase allowed under the agreement.
Crude oil and condensate production in Russia fell slightly in March compared to February, Reuters reported on Friday, citing sources with knowledge of the data.
In March, Russia pumped 11.01 million bpd of crude and condensate, down from 11.08 million bpd it had produced in February, according to Reuters’ sources.
Russia doesn’t differentiate between crude oil production and condensate production in its official output figures. After years of debates within the OPEC+ group, Russia has won an exemption not to consider its condensate output as part of the production cut agreement. It is thought that Russian condensate production is in the region of 800,000 bpd-900,000 bpd.
While Russian production has not slumped too much between February and March, buyers in the West continue to steer clear of Russian oil cargoes, and many analysts say it is a matter of time before at least some Russian supply comes off the market.
In another sign that Russia could be struggling to sell all of its cargoes, Transneft, the Russian oil pipeline operator, has informed local oil companies that it would be capping the intake of yet-to-be-sold crude because of full storage, Reuters reported last week, quoting sources with knowledge of the plan.
By Charles Kennedy for Oilprice.com
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The latest straw is that in March Russia pumped 11.01 million barrels a day (mbd) of oil down from 11.08 mbd it had produced in February, according to Reuters’ sources.
However, a reduction of mere 70,000 barrels a day (b/d) less could be attributed to technical issues as the Russian Energy Ministry pointed out or could have been due to a fire at a Gazprom processing plant in West Siberia that held back some condensate production.
If claims that consumers are shunning Russian oil exports and that exports are down by 1.0-3.0 mbd as it was claimed, we would have seen Brent crude jump to $140-$150 a barrel. Oil prices don't lie.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London