Russia’s Oil Production Drops To Nearly Three-Year Low

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By Tsvetana Paraskova

Rosneft

Lower output from Russia’s largest oil producer Rosneft has resulted in total Russian production falling to a near three-year low in early July, Reuters reported on Tuesday, citing industry sources.

Russia’s oil production in the first days of July averaged 10.79 million bpd, the lowest level since August 2016, when production stood at 10.71 million bpd, according to Reuters’ sources and calculations.

Rosneft’s production between July 1 and 8 went down by 11 percent from the average production level in June, one industry source told Reuters.

Production of Rosneft’s Yuganskneftegaz unit in West Siberia slumped by a whopping 30 percent in the first week of July from the June average, a source in the industry told Reuterstoday.

To compare, total Russian oil production in June inched up to 11.15 million bpd from 11.11 million bpd in May, according to Reuters calculations of tons in barrels, based on data from the Russian Energy Ministry.

Last month, Russian oil companies ramped up production, while output at fields run by foreign companies dropped by 11.2 percent from the levels in May.

Despite the rise in the June production, Russia was still complying, for a second month, with its pledge under the OPEC+ deal in which it vowed to reduce production by 230,000 bpd from October’s post-Soviet record level of 11.421 million bpd, to 11.191 million bpd.

Last week, Russian Energy Minister Alexander Novak said that Russia’s oil production in June was 50,000 bpd below the level Moscow had pledged under the production cut agreement.

In May, Russia finally complied with its share of the production cuts as part of the OPEC+ deal, but not by choice. Russia’s oil production continued to trend lower in May as exports via the Druzhba oil pipeline were restricted due to a contamination issue, helping Russia to finally fall in line with the oil production cuts.

By Tsvetana Paraskova for Oilprice.com

 

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