Russia increases oil production despite Western pressure – Kommersant

Russia boosted oil production in September as major Western countries debated capping energy prices following Moscow’s invasion of Ukraine, business daily Kommersant reported on Wednesday, citing unnamed sources close Datas.

Last month’s average daily production rose 1% from August to nearly 1.47 million metric tons, or 10.8 million barrels per day, according to the publication.

Russia processed 760,000 metric tons of crude a day in September despite lower seasonal domestic demand and lower payments on the so-called fuel tax write-off mechanism.

In January-September, Russia’s oil production increased by 3% compared to last year, totaling 400 million metric tons.

Russia is currently extracting 10.7 million barrels of crude and natural gas condensate per day (bpd), levels comparable to July.

Russia’s oil production has been on the road to recovery since falling sharply in April, then falling in August, due to Western sanctions.

Experts polled by Kommersant expect Russia’s oil production to fall by just 1% by the end of 2022.

An EU embargo on Russian crude oil and petroleum products, which will come into force in February 2023, is expected to reduce Moscow’s exports to Europe.

Reports have also emerged in recent days that the G7 countries are set to agree on a price cap for Russian oil and EU leaders were expected to announce a price cap later Wednesday as part of of the latest round of sanctions.

According to Kommersant, Russia’s oil exports by sea and pipeline in September remained at August levels of around 672,000 tons per day.

The newspaper said there were signs of increased rail exports, mainly to China, as EU sanctions made shipping from Russia’s Baltic ports unprofitable.

Russia’s oil production of 10 million bpd would be 1 million bpd below its quota between members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

OPEC+ is meeting later on Wednesday to discuss a first major production cut of up to 2 million bpd since the Covid-19 pandemic. Kommersant notes that the decision will not force Russia to cut oil production.

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