HomeMediaLatest NewsThe pipe is calling - Russia's oil and gas on the threshold of 2024

The pipe is calling - Russia's oil and gas on the threshold of 2024

27 December 2023

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

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Finam.ru about the Russian oil and gas industry outcomes in 2023.

"Oil and gas revenues in January-November 2023 exceeded the plans of the Ministry of Finance by almost 0.9 trillion rubles, despite the fact that in the first half of the year they lagged behind it by more than 0.5 trillion. In general, the second half of the year turned out to be better than expected, despite the autumn ban on the motor fuels export. The income growth was provided by a combination of factors: first of all, the weakening of the ruble exchange rate, an increase in oil prices and the fixation of the Urals-Brent discount for tax purposes," the expert commented.

Speaking about international markets, Belogoryev, in turn, noted that 2024 is unlikely to bring any radical changes, since in 2022-2023 suppliers adapted to new conditions. According to him, some concerns are related to the possible volatility of demand for Russian oil from India (supplies to China are more stable), but this risk will be with us for a long time.

He also noted that in 2024 there are no obvious reasons to reduce oil and gas revenues of the Russian budget. However, at the beginning of the year, an increase in price discounts is possible due to increased control over compliance with the "price" cap by the United States, the EU and the United Kingdom, which increases the cost of freight and insurance for the Russian oil cargoes transportation, the expert added.

"A notable new challenge in 2024 will be the need to redirect LPG exports, which had previously been almost untouched by sanctions. The EU, which accounted for about 75% of all Russian LPG supplies in 2023, imposed an embargo on them on December 18. This is not an easy task, given the lack of necessary transport infrastructure in the eastern direction (railway carrying capacity and port terminals)," Belogoryev said. 

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