EU Sanctions, Dropping Russia’s Prior Month Oil Exports 42%…

Russia: “Decrease in Production for This Year also”

EU Sanctions, Dropping Russia’s Prior Month Oil Exports 42%…

Russia: “Decrease in Production for This Year also”

Russia Federation’s Ministry of Energy:

“Due to Withdrawal from European Market and Readjustment in Energy Flows”

With the effects from the sanctions that the European Union has imposed on Russia for invading Ukraine, Russia’s oil exports for the previous month was almost half that of a year ago. Russia expected the oil production volume for this year to drop slightly from the previous year. In a monthly oil report issued on March 15 (local time), the International Energy Agency estimated that Russia raised revenue of USD 11.6 bln in February of this year from oil exports.

This amount is 42% less than the revenue of USD 20 bln raised by Russia in February of last year from oil exports, and 18% less from the USD 14.3 bln of January of this year. The IEA analyzed that Russia’s oil production of last month was close to the level before the invasion of Ukraine, but exports decreased at least 500,000 bpd to record 7.5 mln bpd.

Notably, exports to the EU last month dropped 760,000 bpd to record 580,000 bpd. The IEA reported that during the past year, Russia had transferred the volumes exported to the EU and North America, etc. to Asia, Africa, and the Middle East. In Asia, India and China are taking the lead in importing Russian crude oil. The two countries took up at least 70% of last month’s oil exports by Russia.

The EU, G7 and Australia launched a price cap on Russian crude oil in December of last year, and on Russian oil products in February of this year. In addition to this, the EU imposed an outright ban on import of all Russian oil products. “We will have to wait and see if the price cap will result in sufficient demand for Russian oil products, or if production will drop due to the effects from the sanctions,” said the IEA. “Russia’s profits are already decreasing.”

In addition, it made the assessment that, “As globally there is no restriction imposed on the supply of crude oil and oil products, the G7 sanctions are creating the effect of diminishing Russia’s profit creation ability.” Russia has made the outlook that this year’s oil production volume will be slightly less than that of the previous year, according to Sputnik News Agency. “This year’s oil production volume is expected to decrease slightly, when including voluntary reduction of production…Gas production will also continue to decline,” stated Nikolai Shulginov, Russian Minister of Energy, at the Federal Assembly of Russia on this day. “Reduction of production of oil and gas results from withdrawal from the European market and readjustment of energy flows,” he added.

(Istanbul, Paris = Yonhap News)