Russian oil production falls less than 3% as sanctions have ‘limited’ effect
Russian oil production has fallen by less than 3% since the invasion of Ukraine, with a swathe of western energy sanctions having only a “limited” effect, the International Energy Agency has found.
In its latest monthly oil report, the IEA said Russia’s oil production in July was 310,000 barrels a day below prewar levels, while total oil exports were down by about 580,000 barrels a day.
Moscow’s exports of crude and oil products to Europe, the US, Japan and Korea had fallen by nearly 2.2m barrels a day since its invasion in February, but the IEA said the rerouting of flows to India, China, Turkey and others, along with “seasonally higher Russian domestic demand, has mitigated upstream losses”.
Its report estimates that Russia generated $19bn (£16bn) in oil export revenues last month, and $21bn in June. It said: “The outlook for world oil supply has been revised upward, with more limited declines in Russian supply than previously forecast.”
In June, China overtook the EU as the biggest importer of Russian crude.
Sign up to First Edition
Archie Bland and Nimo Omer take you through the top stories and what they mean, free every weekday morning
However, the IEA said the EU embargo on Russian crude and product imports, which comes into full effect in February 2023, would result in “further declines” as about 1m barrels a day of products and 1.3m barrels a day of crude “would have to find new homes”.
Russia is expected to cut down on production after the bloc’s sanctions kick in, leading to oil giants including Saudi Arabia benefiting from the rise in European oil demand, the IEA said.
Meanwhile, with natural gas and electricity prices soaring, “incentivising gas-to-oil switching in some countries”, the IEA has raised its estimates for
Read more on theguardian.com
