Oil production in Russia, reduced to the level of the first year of the Covid pandemic

Against the backdrop of agreements with OPEC+ participants, Russia adjusted its forecast for oil production in 2024 to 505-515 million tons - 3-5% less than the previous year, with the new estimated production being at the level of 2020, the first of the Covid-19 pandemic, when during the year companies and industries around the world drastically reduced their activity during states of emergency and states of alert, according to the Russian publication Kommersant.

The cited source states that although the Ministry of Energy planned a production of 523 million tons in early 2024, Deputy Prime Minister Alexander Novak said these days at the St. Petersburg International Economic Forum (SPIEF 2024): "We will be somewhere in the range of 505 -515 million tons. I think closer to 515 million tons, but we will know this at the end of 2024, because until then we still have to make various adjustments".

According to Kommersant journalists, oil production may fall to the minimum reached in 2020, when the Russian Federation extracted 512.8 million tons of oil. They also point out that Russia stopped reporting oil production data last year and that officials said the main reason for the decline remains the country's participation in the OPEC+ deal to limit production.

In March 2024, the Russian government announced stages of voluntary oil production cuts as part of coordination with some OPEC+ countries. In April, the Russian Federation promised to cut oil production by 350,000 bpd and exports by 121,000 bpd. In May, production was to be cut by 400,000 bpd, exports were planned at 71,000 bpd, and now in June production was to be cut by 471,000 bpd.

OPEC+ countries recently reached an agreement to extend voluntary global oil production cuts by 2.2 million barrels per day in the third quarter of 2024, after which they promise to gradually increase production.

According to Alexander Novak, in the four months of 2024, Russia increased the share of "friendly" countries in the structure of oil exports to 95%, and up to 70% of payments for energy resources are provided in national currencies. The Russian Deputy Prime Minister estimated for the cited source that by 2030 global oil demand will increase to 110-115 million barrels per day and specified that in the coming years it will be impossible for production to reach such a level.