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Russia’s Oil Production Slips Below 10 Million Bpd

Russia’s Oil Production Slips Below 10 Million Bpd

Two anonymous sources from Reuters said, for the first time since July 2020, that Russia’s crude oil production fell below 10 million barrels per day on Monday.

The decline in Russian crude oil production is largely due to sanctions and self-punishment by regular Russian oil customers and the logistical problems those measures created, including payment issues and a lack of storage availability.

So far in April, Russia’s average crude oil production for the first eleven days of April has averaged 10.32 million barrels per day – a 6% drop from March levels. But the trend is downward, with Russia’s average crude production from April 1 to April 6 averaging 10.52 million barrels per day.

Russia’s production quota of crude, set by OPEC + for May, amounted to 10.549 million barrels per day, on par with the level allocated to Saudi Arabia.

The Russian Central Bank said, on Monday, that Russia’s trade surplus for the first quarter of this year more than doubled compared to the first quarter of 2021, with oil and gas revenues rising due to higher prices. Russia’s oil and gas revenues in April are expected to reach an additional $9.6 billion.

The European Union is looking to add more sanctions on Russia, including those on Russian oil imports, although OPEC warned the European Union on Monday that compensation for lost Russian barrels of oil – if they chose to go down this path – would be nearly impossible. OPEC’s crude oil production for March rose by only 57,000 bpd from the previous month – 54,000 bpd of it from Saudi Arabia.

While Russian crude oil production declined, Russia’s crude oil exports rebounded in the first full week of April to the highest level so far this year. However, some shipments are making the long journey to Asia – leaving crude oil off the market for weeks in the meantime.

By Julian Geiger for Oilprice.com

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