HomeMediaLatest NewsGot off the oil needle: when Russia will recover lost oil and gas revenues

Got off the oil needle: when Russia will recover lost oil and gas revenues

18 January 2021

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Aleksey Belogoryev, Deputy Principal Director on Energy Studies commented to News.ru on the probably timing of the Russia's oil and gas revenues recovery.

Within the period from January to November 2020, Russia's revenues from oil exports decreased by 40.9% compared to the same period in 2019 and amounted to $ 66.39 billion, according to the Federal Customs Service. At the same time, in terms of volumes, the losses were much lower - 11%, and a total of 220.241 million tons were sold.

Gas losses were added to oil losses. Export revenues of "Gazprom" in January-November 2020 decreased by 41.8% - to $ 122 billion. Physical export of gas over the reporting period fell by 10.5% - to 178.4 billion cubic meters.

Problems with demand in the gas market were caused by the coronavirus pandemic, but negative price dynamics began in the spring of 2019 and was associated with an oversupply in the LNG market, explained Alexei Belogoryev, Deputy Director for Energy at the Institute for Energy and Finance.

Gas prices are now significantly higher than last winter, the expert notes. According to him, this is mainly due to weather conditions - cold winters in Europe and Asia.

“The demand for gas is high now, and therefore prices are growing. By the way, in the current conditions Gazprom is beginning to win competition from other suppliers. If in the 1st-3rd quarters of 2020, the prices of Gazprom with their oil pegs were higher compared to the spot prices, now the situation is the opposite. Apparently, Gazprom should have good export figures for the autumn-winter period,” Aleksey Belogoryev says.

Nevertheless, Russia's oil and gas revenues will not recover to the level of 2019, the expert is sure. There are still many uncertainties in terms of both demand and price. To the level that was before the pandemic, Russia's oil and gas revenues may return in 2023, the economist said.
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