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Russia’s oil production dropped slightly in October compared to September, but the decline could accelerate from November as the EU prepares to introduce an embargo on imports of Russian crude from December 5, Russian business daily Kommersant reported on Monday, quoting sources familiar with the situation.
In October, Russian oil production, including condensate, was 1.47 million tons of oil per day, or 10.78 million barrels per day (bpd), per Reuters estimates. The October production was slightly down from 10.8 million bpd reported for September.
Russian crude exports – by sea and via pipeline – also dropped in October by around 2% from September to around 4.7 million bpd.
Until the EU embargo enters into force, Russian production is expected to stay at more or less the current levels or slightly drop. But after the embargo kicks in, demand for Russian oil will decline sharply, Maxim Malkov from Kept told Kommersant. Russia will need to reroute its oil exports, and will be no easy task as even buyers outside of the EU, including some in India, have started to refuse to buy Russian oil for fear of secondary sanctions, Malkov said. Yet, willing buyers are looking at alternative routes and mechanisms to procure Russian oil at discounts, the analyst told Kommersant.
According to the International Energy Agency (IEA) with data for September, total Russian oil exports fell by 230,000 bpd to 7.5 million bpd in September. This was down by 560,000 bpd compared to pre-war levels. Shipments of Russian oil to the EU dropped by 390,000 bpd in September compared to August.
“With less than two months to go before a ban on Russian crude oil imports comes into effect, EU countries have yet to diversify more than half of their pre-war import levels away from Russia,” the IEA said in its Oil Market Report in October.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com