The production comes true

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, gave a comment to the Kommersant newspaper about oil production in Russia.

The stability of Russian oil production is associated with high discounts, which allow us to maintain high physical volumes of exports, Sergey Kondratiev believes: marine exports remain at the highest levels over the past six months, compensating for the decline in supplies via the Druzhba oil pipeline.

"At the same time, refineries also seem to maintain processing at a high level due to stable demand in the domestic market and the redirection of oil products supplies to the Middle East and Asia," the expert admits.

However, in the coming months, the Russia may face a scenario in which the volume of processing will decrease. At the same time, diesel refineries can at least maintain the current volume of fuel output, since the current crack spread (the difference between the price of oil and the basket of petroleum products received) allows many export refineries to feel quite good, Mr. Kondratiev believes. According to him, logistics and the search for new partners in local markets remain the key risk, however, it is likely that in February—March 2023, the decline in refinery output will be less than previously expected and will not exceed 0.1–0.15 million barrels per day.