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Russian refineries processed 5.49 million b/d of crude in the week spanning June 8-14, a 2-month high, Bloomberg has reported. That’s close to 200,000 barrels a day more than the previous week’s clip as serious questions continue being asked about the country’s commitment to production cuts agreed on by OPEC+.
Back In February, oil prices received a boost after Russia’s Deputy Prime Minister Alexander Novak announced that the country would cut oil production by 500,000 barrels per day, or around 5% of output. Novak has on numerous occasions insisted that Russia is implementing the cuts in full as pledged, but surging exports of seaborne crude continue raising eyebrows.
“Russia is restoring its daily refinery throughput as the spring maintenance season is largely over. We will see the last key facilities, including Surgutneftegas PJSC’s Kirishi, coming back online in the first days of July. Then the refinery runs will fully return to pre-maintenance volumes,” Viktor Katona, head of oil analytics at research firm Kpler, has told Bloomberg.
Recently, the World Bank reported that Russia’s economy will contract a mere 0.2% in the current year, way softer than last year’s 2.1% dip thanks to increased buying of its crude by India and China as well as European countries that banned Russian oil imports importing huge amounts of oil commodities from the two countries and also from United Arab Emirates, Singapore and Turkey.
India in particular has dramatically ramped up purchases of Russian oil, with crude imports growing staggering 1,500% in May to over 2.15 million barrels per day in May.
A recent report by the Center for Research on Energy and Clean Air (CREA) noted that western countries bought $42 billion worth of laundered Russian crude in the form of various oil products from nations that are friendly towards Russia, with India leading the five other countries.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.