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Oil will keep volumes

14 November 2022

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to the Kommersant newspaper on the oil exports dynamics from Russia.

Despite the sanctions, oil production in Russia will hardly fall in 2023. The level of production will remain close to the average for the last 15 years. OPEC analysts came to such conclusions in the latest report on the situation on the market. According to their forecasts, in 2023 Russia will produce more than 10 million barrels per day. At the same time, from December 5, a ban on the export of Russian raw materials to Europe comes into force. And from January 19, according to the US Department of the Treasury, a ceiling on fuel prices can be introduced.

Western consumers are now unlikely to influence the decisions of exporters, Sergey Kondratiev notes:

“The key factor that has been putting pressure on demand in recent months is the very weak dynamics in China due to ongoing COVID restrictions. The not very calm situation on the European oil market also influences, the level of economic activity is declining. Of course, there may be proposals to reduce quotas, but to a lesser extent. It is now important for the cartel countries to maintain high revenues from oil prices, and not to increase their market share. We may face oil prices in the range of $80-100 per barrel, and from this point of view, it is clear that the developed countries will not have much room for maneuver. Shale oil production in the US is practically not growing, the US authorities may extend the program for the sale of fuel from the strategic reserve”.

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department
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