Nobody canceled the plan for the shaft – Newspaper Kommersant No. 66 (7511) dated 04/17/2023

Exports of Russian oil and oil products increased by 600 thousand barrels per day in March, reaching 8.1 million b / d – crude oil supplies were at the same level as a year ago, and the export of oil products exceeded last year, according to data from the International Energy Agency (IEA). At the same time, the production cuts announced not only by Russia, but also by some OPEC+ countries, have already supported the growth in oil prices – the average price of Russian oil supplied abroad in early April, apparently, exceeded $60 per barrel, or at least close to to this level.

The production cuts announced by the participants in the OPEC+ deal on April 2 could increase the shortage of oil in the world market, despite the slowdown in activity in many major economies, according to the April forecast of the International Energy Agency. Recall that the OPEC+ countries plan to reduce production from May until the end of the year by a total of 1.16 million barrels per day (in excess of existing quotas), while Russia, which had earlier promised to reduce production by 500 thousand b/d starting from March, extended this restriction to the end of the year.

OPEC+ production is expected to decline by 1.4 million b/d from March to December, while oil supply from non-OPEC countries will increase by only 1 million b/d – price increases will not lead to a sharp increase in OPEC+ production, as the IEA expects increase in shale production in the United States. In general, for the year, the production of the participants in the transaction may decrease by 760 thousand b/d after an increase of 3.1 million b/d last year. In non-OPEC+ countries, deliveries will increase by 1.9 million b/d against 1.5 million b/d a year earlier. The total supply of oil may increase by 1.2 million b/d against 4.6 million b/d last year.

Russian production in March, according to the IEA, decreased by about 290 thousand b/d, to 9.58 million b/d, taking into account condensates, the figure amounted to 10.95 million b/d (minus 450 thousand b/d compared to from February last year). In general, for the year, the IEA forecasts production at the level of 10.6 million b/d – this forecast was improved by 210 thousand b/d, it provides for a reduction in production year-on-year by 530 thousand b/d (note that the Ministry of Energy of the Russian Federation in April stopped the publication of data on the production and export of oil and gasoline). OPEC expects a total reduction in Russian production this year by 750,000 b/d (to 10.28 million b/d) after rising by 230,000 b/d last year.

At the same time, the export of Russian oil and oil products in March rose to a record level since April 2020, increasing by 0.6 million b/d compared to February, to 8.1 million b/d (for comparison, in 2022, exports averaged 7.7 million b/d, in 2021 — 7.5 million b/d). Crude oil deliveries increased by 100,000 bpd to 5 million bpd by February (exports were at the same level a year ago), while supplies of petroleum products increased by 450,000 bpd to 3.1 million bpd /d (by March 2022, the increase was 0.7 million b/d). The increase in exports also led to an increase in export revenue by $1 billion, to $12.7 billion, but this figure was 43% lower than a year ago, the IEA calculated.

The main export market for Russian oil in March was India (2.1 million b/d), ahead of China (1.9 million b/d, of which 1.7 million b/d was crude oil). According to OPEC, in February, Russia accounted for 19% of Chinese crude oil imports (total it amounted to 10.7 million b/d), Saudi Arabia was in second place in terms of supplies (14%), and Iraq was in third place (12%). Indian imports amounted to 5 million b/d, but Russia’s share was 38% (Iraq’s share was 20%, Saudi Arabia’s was 8%, and the United States was 5%).

Deliveries to the EU countries and Turkey amounted to 0.6 million b/d in each of the directions (in the case of oil exports to Europe, these are deliveries via the Druzhba oil pipeline and by sea to Bulgaria, both directions are not subject to the embargo on the import of Russian oil ). The share of deliveries without specifying the destination also doubled (from 0.3 to 0.6 million bpd). The export of petroleum products increased to the EU (plus 140 thousand b/d compared to February, but minus 1.5 million b/d per year), to Turkey (plus 130 thousand b/d per month), as well as to the countries of the Middle East, Africa and Latin America (by 350, 320 and 80 thousand b/d, respectively, compared to February 2022).

The reduction in deliveries announced by OPEC + supported prices for Russian oil – on average, since April 5, they have exceeded the “ceiling” set by the G7 countries in the amount of $60 per barrel, but this calculation takes into account the increase in the cost of ESPO oil to $74 per barrel, then how the price of Urals oil, excluding delivery and insurance, with deliveries from the ports of the Black and Baltic Seas, rose to $55 per barrel – such an increase in prices is not yet an obstacle to the supply of Russian oil by foreign ships.

Tatyana Edovina