The cut in oil production announced earlier by the Russian government is inconsistent with data on the country’s maritime exports and deliveries to domestic refineries in March. This adds to the uncertainty of how much raw material the Russian Federation actually extracts. The analytical agency Bloomberg tried to understand the situation.
Moscow has pledged to cut crude oil production by 500,000 barrels a day between March and December in response to Western trade sanctions and price caps imposed by G7 industrialized nations. According to the Ministry of Energy, the decline in production was found to be 40% higher.
Russia’s energy ministry said domestic industry actually cut oil production by around 700,000 barrels a day last month. At least that’s what Bloomberg writes, citing a source familiar with the actual numbers.
Producers pump an average of 1.285 million tons of crude oil per day, according to a Bloomberg insider at the Energy Department. That’s the equivalent of just over 9.4 million barrels, meaning the only drop in crude oil last month was nearly 700,000 barrels per day.
Total crude oil and condensate production in the country in March averaged 1.413 million tonnes, the source said. That equates to 10.36 million bpd, down from 11.1 million bpd in February, Bloomberg estimates. As a result, the overall reduction averaged 740,000 barrels per day, according to data compiled by the agency. In other words, the real drop in production was much more severe than officially announced in advance.
Last year, Moscow classified its oil statistics because of their “sensitive” nature, making it difficult to assess the implementation of supply cuts, apart from assurances from energy officials. As a result, Russian watchers have begun tracking domestic offshore oil exports and monitoring domestic oil refining rates as indicators to gauge net crude production. However, both indicators showed no visible declines last month.
In turn, data based on domestic industry figures and vessel tracking shows the country’s four-week average crude oil shipment volumes in March were the highest since June last year, while Russian refineries maintained throughput at around one level.
