Moscow predicts crude oil production reductions of 9.3% this year and 9.8% in 2023 due to the partial embargo enacted by Brussels on Russian oil and petroleum products, it was announced this Monday.
According to new budget guidelines from the Russian government, Russia will produce 9.3% less this year (to 475.3 million tons) and 9.8% less next year (to 472.8 million tons).
In the draft budgetary, fiscal and tariff policy for 2023 and the periods 2024 and 2025, reported by the official TASS news agency, the reduction in crude oil production is also affected by discounts on sales of Russia’s main exports, according to with the Russian Ministry of Finance.
In 2021, Russian oil production reached 524 million tons, and since the spring of 2021, Russia has been gradually increasing production due to the OPEC+ (Organization of Petroleum-Producing Countries) alliance agreements. [OPEP] and 10 allies, including Russia).
But since last March, Russia has faced unprecedented international sanctions over its military campaign in Ukraine, which affect the logistics chain, finances, ship insurance and the ships themselves, which cannot dock in European Union (EU) ports. .
In addition, the EU decided at the leaders’ summit earlier this month to ban the purchase, import or transfer of oil and certain petroleum products from Russia by sea to the EU bloc.
The phasing out of Russian crude will take six months for crude oil and eight months for other refined petroleum products.
In the period 2024-2025, Russia will produce an average of 478 million tonnes, according to the source.
Russian Finance Minister Anton Siluanov said Russia could lose up to 17% of oil production by 2022 due to sanctions, although Deputy Prime Minister Alexander Novak said that after a drop in production in April one million barrels a day, the indicators began to recover.
According to the Russian OPEC+ negotiator, there will be 600,000 more barrels a day in June than in May, and Russia is close to recovering February production levels.
Globally, according to Novak, Russia can produce 500 million tons of oil by 2022.
At the same time, the Ministry of Finance predicts that oil and gas revenues in the 2022 Russian budget will increase by 15.2% to 10.4 billion rubles ($183.389 billion).
In 2023 revenues will fall to 9.1 billion rubles (160,661 million dollars) and in 2024 to 8.4 billion rubles (148,122 million dollars).
The price of Russian oil (Urals) at the end of 2022 will be 80.1 dollars per barrel, and it is expected that afterwards it will begin to fall and reach 61 dollars in 2025, according to the Russian government.
At the same time, the discount to Brent crude is now over $33 a barrel.
The Russian Ministry of Finance predicts that as Europe replaces Russian oil and redirects its supplies, the cost of the Urals will decrease, projecting that in 2023 it will reach 71.4 per barrel, in 2024 66 dollars and in 2025 a total of 61 dollars per barrel.
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