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As many Western buyers shun Russian oil, gas, and coal, Moscow will find new customers for its energy products both domestically and overseas, Russian President Vladimir Putin was quoted as saying on Wednesday.
“As for Russian oil, gas, coal, we will be able to raise their domestic consumption, stimulate higher complexity of feedstock processing and raise energy supplies to other parts of the world -- somewhere, where they are really needed,” Putin said during a meeting with the cabinet and company representatives, as carried by Bloomberg.
Traditional buyers of Russian oil in the West, including international oil majors, have said they are backing out of new deals to take and trade Russian oil, following Russia’s invasion of Ukraine at the end of February.
Buyers in Asia are taking some of the oil unwanted in the West, but logistics, high freight rates, insurance, bank guarantees, and payment hurdles prevent willing buyers in Asia from purchasing all the oil Russia has traditionally sold on the European market.
Moreover, the European Union imposed last week a ban on imports of coal and other solid fossil fuels from Russia as of August 2022 as part of the fifth round of EU sanctions against Russia over its invasion of Ukraine.
Russian oil production fell in the first week of April by 4.5 percent compared to the March average—the steepest decline in output since May 2020, according to Russia’s energy ministry data seen by Bloomberg.
Between April 1 and 6, Russia pumped the equivalent of 10.52 million barrels per day (bpd) of oil, per Bloomberg calculations based on energy ministry data in tons. That’s some 500,000 bpd below the average Russian production for the whole month of March.
For the first time since July 2020, Russia’s crude oil production slipped below the 10 million bpd mark on Monday, two anonymous Reuters sources suggested.
Russian oil supply is expected to fall by 1.5 million bpd in April, while shut-ins are forecast to accelerate to around 3 million bpd from May, the International Energy Agency (IEA) said in its April Oil Market Report today.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.