The Russian war on Ukraine is expected to cast a shadow over Moscow’s oil and gas production, due to Western sanctions on the latter.
Speculations indicate that Russia’s production of crude oil will decline by 10.25% during 2022, compared to last year.
Russian production of black crude will remain below its levels in 2021, until 2025.
Many Western countries decided to ban their imports of Russian fuel, in the wake of its attack on Ukraine last February, and major energy companies announced the suspension of their operations in Moscow and stop buying Russian crude.
Declining oil and gas production
The Russian Ministry of Economic Development expects the country’s gas production to decline by 5.91% by the end of this year.
Oil production, including gas condensate, will decline from 524 million tons in 2021, to 475.3 million tons in the best case, or to 433.8 million tons in the worst case.
The ministry expects oil production in the base scenario to reach 472.8 million tons by 2023, declining to 405.3 million tons in the conservative scenario, then production to reach 476.1 million tons in 2024 (416.4 million tons in the conservative scenario).
Oil production in 2025 is expected to reach 480.5 million tons in the base scenario (421.3 million tons in the conservative scenario).
Both scenarios rule out a recovery in gas production; Including associated gas, to the level of 763.5 billion cubic meters, recorded in 2021, during the next 4 years, according to the Russian news agency “TASS”.
The average production of Russian oil and condensate, during the period from 1 to 15 May, increased by 1.7%, to 1.398 million tons, compared to 1.374 million tons in April.
Russian Finance Minister Anton Siluanov had predicted that Moscow would lose up to 17 percent of its oil production in 2022 due to Western sanctions.
Russia’s Ministry of Economic Development expects to produce 720.9 billion cubic meters of gas this year (702.4 billion cubic meters in the conservative scenario).
The ministry’s predictions indicate that gas production will decline by 2023 to 720 billion cubic meters (699 billion cubic meters), and 730 billion cubic meters in 2024 (665.8 billion cubic meters).
The ministry expects that Russia’s gas production in 2025 will reach 735 billion cubic meters (665.1 billion cubic meters).
In terms of Russia’s oil and gas exports, the Ministry of Economic Development expects crude oil exports to decline to 228.3 million tons in 2022 from 231 million tons in 2021, and to 224.8 million tons in 2023.
Russian exports of crude oil are expected to recover again in 2024 and 2025; As exports will jump to 221.8 million tons and 229.5 million tons, respectively.
The Ministry of Economic Development in Russia expects natural gas exports to decline from 205.6 billion cubic meters in 2021, to 185 billion cubic meters in 2022, and to 155.3 billion cubic meters in 2025.
Russia’s exports of fossil fuels amounted to about 63 billion euros ($66.46 billion) since the invasion of Ukraine on February 24 until late April, according to data from the Center for Research on Energy and Clean Air (CREA).
The European Union imported about 71 percent of Russia’s oil and gas exports, worth 44 billion euros ($46.2 billion).
In the Middle East, Egypt’s exports of Russian oil amounted to 0.77 billion euros, and in Asia, Russia has received about 0.66 billion euros from India since the invasion of Ukraine.
(Euro = 1.05 USD)
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