Russian crude production has remained resilient in 2023 despite Europe’s ban on imports and the price cap for shipped oil to countries outside of the continent, analyst Rystad Energy said on Thursday.
In his outlook for the next six months, Claudio Galimberti, the senior vice president of analytics, told a webinar that Russia’s production had outperformed expectations and was on course to pump 10.9m barrels per day when it had been expected to fall below 10m.
Production dropped by almost 1m barrels per day after the invasion of Ukraine but recovered before the European Union imposed its crude and product import bans that were introduced in December and February respectively alongside an oil price cap.
Oil can only be shipped outside of the EU without breaching the bloc’s sanctions regime if crude barrels are sold below $60 and refined oils sold below $100 or $45, depending on the product.
“It does look like Russia is managed to keep the production and the flow of crude and products at the same level that they had before the embargo and before the price cap,” Galimberti said.
“So very strong resilience by the Russian production.”
While production has remained near pre-war levels, exports have fallen, with barrels destined for Europe redirected to markets further afield.
The International Energy Agency reported this month that willing buyers in Asia — mainly India and, to a lesser extent, China — had snapped up discounted crude cargoes.
It reported February’s Russian production at 9.91m barrels per day — 570,000 barrels below its target.
Refined oil products had gone to a wider range of markets outside of Europe but increasing volumes on the water suggested potential difficulties in selling its oil, the IEA said.
Overall oil export revenues declined to $11.6bn in February — nearly half of pre-war levels. The G7, which introduced the price cap, said the scheme enabled countries to negotiate lower rates for Russian oil.
Alexander Novak, Russia’s deputy prime minister, said last week that the country would cut production by 500,000 barrels per day from March until the end of June.
