Russia’s finance ministry has slashed its forecast for taxable oil production for next year, a draft budget seen by Reuters showed on Friday.
The draft budget covers the next three years and forecasts a decline in crude oil production and refining as Western sanctions bite.
The finance ministry sees Russian oil and gas condensate production at 490 million tonnes next year, or 9.84 million bpd. This is a 7% - 8% decline from the 10.54 million bpd to 10.64 million bpd that the ministry anticipated this year, the budget showed.
Its outlook for oil production for 2022 was reduced to 515 million tonnes. After the drop off to 490 million tonnes next year, the finance ministry expects oil production to increase to 500 million tonnes for 2024 and 2025.
Oil refining and export volumes that are subject to tax have been revised downward to 8.20 million bpd next year, from the previously expected 10.15 million bpd.
Expected oil refining volumes were cut by nearly 20% to 230 million tonnes, while oil exports subject to exports duty were revised down 19.4% to 178.2 million tonnes.
“The economy ministry’s forecast is based on overall oil exports increase, including an increase of exports eligible for tax relief, which is related to an expected rise of production at fields, which have exports duty relief,” the finance ministry told Reuters.
The refusal of some countries to work with Russia in the oil markets and having to discount Russia’s main exports triggered the revised forecast with regard to oil production.
The data release comes as U.S. and Western officials hash out their plan to cap the price of Russian oil. Russia has threatened to stop oil deliveries to any buyer engaging in price capping.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.