Russian oil exports set for a record 2016

Jul 05, 2016 12:00 AM

Russia has increased crude exports by almost five percent to 5.55 million barrels a day in the first half of the year compared to 2015. Analysts say exports may reach a record high this year.

The Russian Energy Ministry says output last month grew by 1.14 percent from a year earlier to 10,843 million barrels a day, with increases every month since July 2014. The ministry is predicting a 4.5-4.9 percent growth this year.

“If production remains steady, then it will likely be a record year for exports,” said Christopher Haines, head of oil and gas at BMI Research, as cited by Bloomberg. “This should mean competition is strong, especially with Iran sending more oil into southern Europe.”

In April, Russian crude exports jumped nine percent to their highest level in sixteen months. Overall, the country exported 20.3 million tons of crude that month.

Crude exports from Russia continue to grow; the country became the world's leading oil and natural gas exporter last year, according to BP's annual statistical review of world energy. It has overtaken Saudi Arabia in crude exports, and retained the top spot in exports of natural gas.

In 2015, Russia’s oil production reached a new post-Soviet high of 11 million barrels per day, with three-quarters of it going for export.

Low oil prices and a higher tax burden have made it more profitable for Russian companies to export oil rather than deliver it to local refineries. Increased oil production was another reason for the surge in exports.

In 2016, Gazprom Neft is expecting to produce more from the northernmost onshore oilfields in Russia – the Messoyakha fields – which could be as much as 470 million tons of oil and gas condensate.

Lukoil has started development drilling at the Filanovsky oilfield in the Caspian Sea. In the next 30 years, the company intends to invest at least $14 billion in the field that has recoverable oil reserves at 151.3 million tons and 26 billion cubic meters of natural gas.

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