Most of the major Russian oil companies are increasing oil production against the backdrop of rising global quotations and a significant weakening of the ruble. Western sanctions that discourage foreigners from buying spot shipments of Russian oil have not yet had a significant impact on production. In the context of the easing of restrictions by OPEC + in the first two days of March, it rose by 0.5%.
Oil production in Russia for the first two days of March increased by 0.5% to 1.5 million tons per day, Interfax reported. Oil companies are increasing oil production due to the weakening of the terms of the OPEC+ deal. Since April, OPEC+ has again agreed to increase production by 400 thousand barrels per day in accordance with earlier agreements.
- Thus, Gazprom Neft increased production in two days by 4% to 111 thousand tons,
- Rosneft — by 0.3% to 467 thousand tons per day,
- LUKOIL has kept production at 220,000 tons per day.
In the context of rising oil prices and a significant weakening of the ruble, it is beneficial for oil companies to increase oil production. But against the backdrop of Western sanctions against the Russian Federation for military operations in Ukraine, Russian companies have problems selling offshore oil shipments. Similar problems exist in the sale of petroleum products for export.
The sale of oil is the largest source of foreign exchange earnings from exports, which, after the freezing of most of the assets of the Central Bank, became the only support for the ruble exchange rate.
Thus, Surgutneftegaz failed to find buyers for its oil volumes in the Baltic ports for a week. If problems persist, this could lead to overstocking, which could force oil companies to cut oil production (as they did during the pandemic). So far, trade problems have not significantly affected production plans. According to “Interfax”Surgutneftegaz planned to ship 1.5 million tons of oil from the Baltic ports in March.