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Russia is on track to pump record oil volumes this year, with production expected to rise by 1.5-1.6 percent annually to 539 million-540 million tons, experts at local RIA Rating agency said on Thursday.
Even though output could decline in the second half of the year, the country is still set to post a new record for full-2016, with a rise of some 6-7 million tons over 2015, the experts say.
In the first half this year, Russia’s oil production increased by 3.1 percent on the year to 272.4 million tons.
Oil output may be at all-time highs, but Russia’s oil refining volumes are declining. This is partially due to increased exports of crude and therefore, reduced supply of crude to the local refineries, RIA Rating experts say.
Earlier this week, the Russian Economy Ministry said that it expected crude oil prices to remain stable at their current range of US$45-50 over the next two years, with a sustainable improvement beginning in late 2017.
The latest rally in prices, according to a statement by the ministry, has “a speculative nature” and will not last long. The Economy Ministry went on to add in the statement that oil fundamentals were moving in line with “basic forecasts”; that is, the market is on its way to rebalancing, with the glut gradually easing. But this process will take time.
While speculation and rumors are mounting on what Iraq and Iran’s next moves will be ahead of OPEC’s informal meeting in late September, Russia is among the producers vitally interested in a production cap, as it is heavily dependent on oil revenues.
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.