MOSCOW (Reuters) – Russia’s oil production fell last year for the first time since 2008 and reached its lowest level since 2011 after a global deal to cut production and slow demand caused by the coronavirus, statistics showed Saturday .
Russia’s oil and gas condensate production fell to 10.27 million barrels per day (bpd) last year, according to energy ministry data cited by Interfax news agency.
In tonnes, oil and gas condensate production fell to 512.68 million in 2020 from a post-Soviet high of 560.2 million, or 11.25 million bpd, in 2019.
The sharp decline was almost in line with expectations.
The reading of 512.68 million tons for 2020 was the lowest since 511.43 million tons in 2011, and the first annual decline since 2008 amid the global financial crisis and falling oil prices.
Russia agreed to reduce its oil production in April last year by more than 2 million barrels per day, an unprecedented voluntary cut, along with other major oil producers and the Organization of the Petroleum Exporting Countries (OPEC).
The move was designed to support the oil market in the aftermath of the COVID-19 pandemic.
Since the April agreement, a record for global supply cuts, the group called OPEC + has gradually reduced the cuts and is expected to launch an additional 500,000 bpd into the market in January.
OPEC + is expected to hold its next conference on Monday, January 4. Russia is expected to increase its oil production by 125,000 bpd from the New Year.
Russian Deputy Prime Minister Alexander Novak, who heads Moscow’s ties with OPEC +, has said Russia would support a gradual increase in the group’s output with another 500,000 bpd starting in February.
Darya Kozlova, an analyst at VYGON Consulting, a think tank in Moscow that advises the government, said the market is in better shape now than it was in March or April, when oil demand declined. suddenly at the height of the first wave of the pandemic.
“There is a shortage of around 3 million barrels per day on the market because of what OPEC + has done,” she said.
“Vaccinations (against COVID-19) have started in many countries. So we may see a tactical increase by another 500,000 bpd (agreed) in January. Further actions will depend on market conditions. ”
Reporting by Vladimir Soldatkin: Edited by Neil Fullick