The extensive list of sanctions imposed on Russia, after its invasion of Russia on February 24, does not appear to have damaged the country under the leadership of Vladimir Putin. However, the worst was yet to come.
This is what Rystad Energy, an Oslo-based energy company, said, making it clear that although Russian crude production is expected to remain high for the rest of the summer, expectations are for a dip thereafter due to the national economic recession.
“The country actively increased oil production in June and July, after a massive drop of 1 million barrels per day in April, with the July total recovering roughly to the level seen before the start of the Russian conflict. With Ukraine at the end of February. This remarkable growth was primarily driven by an increase in refining operations, while crude exports fell after reaching record levels of more than 5 million barrels per day in April and May. report.
Rystad thus provides a new estimate of Russian average crude production in 2022 of 9.6 million barrels per day, an increase of 200,000 barrels per day compared to the June forecast.
However, “the imminent EU ban on imports, along with internal economic challenges, means that Russia faces significant obstacles.”
The exploration and production sector in Russia has recovered, but this resilience is in the short term. Domestic consumption helped fill the gap during the peak demand season, but external demand has declined, which poses problems later on. The ban from the European Union is still an unknown factor, and it remains unclear when and where it will have an impact, but it will accelerate the expected decline this fall,” says Daria Melnik, senior analyst at Rystad Energy.
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