Russian oil has flowed to the east
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World oil production in January remained at the level of December (100.8 million barrels per day, bpd). At the same time, prices for oil and oil products (except for diesel fuel) have returned to levels that were before the start of the Russian military operation in Ukraine, the International Energy Agency (IEA) notes in its February report. Its experts expect that oil production in the first half of the year will exceed demand, but the market may still be in a deficit situation with a noticeable increase in consumption. Now the IEA forecast provides for an increase in demand this year by 2 million bpd (including in China by 900 thousand bpd) and a reduction in Russian supplies (Russian Energy Minister Alexander Novak previously spoke about a decrease in oil production in March by 500 thousand b/s).
In January, oil production in the Russian Federation, according to the IEA, decreased by only 30,000 bpd to 9.77 million bpd. Including condensates, production was 160,000 b/d lower (11.2 million b/d) than a year ago. The export of oil and oil products, despite the effect of the European embargo and the ceiling on oil prices (introduced on December 5), increased in January by 300 thousand b/d to 8.2 million b/d (of which 3.1 million b/d – petroleum products), which is close to the peaks of February 2020. At the same time, exports to the EU decreased from 2.2 million b/d to 1.3 million b/d (including oil to 0.6 million b/d), while to China it increased from 1.9 million to 2 .3 million b/d (of which oil supplies hit a record high of 2.1 million b/d). Exports to India, on the contrary, decreased from 1.7 million to 1.6 million b/d. The increase in the volume of deliveries led to a slight (by $200 million) increase in export revenue – up to $13 billion (year-on-year it fell by 36%).
By the end of the first quarter, the IEA expects a reduction in production in the Russian Federation by 1 million b/d compared to the level before the start of the military operation, but admits that the estimate will depend on the impact of the European embargo on petroleum products, which entered into force on February 5 (along with it began and the price ceiling – $100 per barrel for light oil products and $45 for dark ones). In January, deliveries of petroleum products to the EU have already fallen from 1.2 million b/d to 740,000 b/d, while deliveries to the Middle East and South America increased by 400,000 b/d. In February, the IEA expects a reduction in the volume of exports of petroleum products, but notes that the impact of this on the world market will depend on the volume of falling supplies.
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