MOSCOW: Russia, one of the biggest non-OPEC producers, expects a rise in the country’s oil export in 2017. Russia’s deputy energy minister Kirill Molodtsov told reporters that a “slight” increase is expected next year.
Russia’s oil exports are forecasted to rise by almost 5 percent this year to some 253.5 million tons, 4.8 percent more than in 2015. Molodsov said that capabilities of the country allow to increase exports, further underlining that much will depend on the execution and implementation of the first since 2001 deal between OPEC and non-OPEC states to cut production. The official added that oil refining in Russia in 2017 could be reduced by another 2.5 percent to 270 million tons, through better oil refining efficiency, and cuts in heavy oil refining. While the success of the oil deal still remains very fragile and vulnerable to comments and data coming from global producers, state-controlled Rosneft, which accounts for over 40 percent of Russian oil production, earlier stated that the plans of the company for next year allow it to be flexible with production volumes.
Russia’s top oil producer formed its plan on the basis of the actual long-term development program and took into account Russia’s fiscal law and a possibility of carrying out a maneuver with the production volumes to boost sales efficiency in the first half 2017. Under the oil deal, Russia is expected to bear the brunt of reductions falling to a share of non-cartel members (558,000 bpd, the largest contribution by non-OPEC ever), cutting its production by almost 300,000. The reduction is planned to be implemented in a gradual manner. By late March 2017, the country would be producing 200,000 bpd less than its October 2016 level of 11.247 million bpd, the highest production figure of the country so far, and the output would fall to 10.947 million bpd after six months.
OPEC and non-OPEC producers, participating in the agreement account for some 55 percent of global oil production. The pledged joint reduction of the countries, standing at approximately 1.8 million bpd accounts for nearly 2 percent of global oil supply. The largest contribution of some 486,000 bpd is expected to come from the top exporter and OPEC’s de facto leader Saudi Arabia. Oil markets are currently closed for Christmas holiday, while on their last close the prices saw a slight increase with Brent trading at $55.16 per barrel and WTI at $53. With oil prices jumping between $27 and $56 this year, the commitment of producers to the output deal remains crucial for reaching a relative balance and stability.
