BAKU, Azerbaijan, March 20. Russian crude production disruption is expected to peak in the second quarter of 2023, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
OIES says in its latest report that the volume of oil output in Russia was above the forecasts in February, remaining primarily stable and slightly higher than in January, nearing 10.9 mb/d. However, Russia is expected to reduce crude production in March.
In its Reference case scenario, the Institute forecasts Russian oil output disruptions at 810,000 b/d in March, as compared to January and February. OIES predicts 510,000 b/d decrease in Russia’s oil production standing at 10.2 mb/d this year, with disruptions peaking near 1 mb/d in Q2 before slightly reversing by year-end.
“Losses in pipeline crude and products exports are expected to reach y/y at 680,000 b/d, but these will be partially offset by seaborne crude flows that could hold near 2019 levels. Refinery runs declined y/y by 170,000 b/d to 5.4 mb/d in 2022 and are projected to contract further by 450,000 b/d to 5 mb/d in 2023, as EU products ban impacts bite,” reads the report.
OIES says seaborne crude exports will remain resilient and rise year-on-year by 170,000 b/d in 2023 with the Chinese pivot accelerating, while Druzhba flows will be more than halved.
“Russian products are seen being redirected to numerous off-takers in Asia, the Middle East and Africa but around 40 percent of total EU banned products remain at risk for the year. The largest impact of EU sanctions on Russian oil continues to be seen on trade with oil-on-water remaining at record-high levels pressuring shipping costs and oil supply chains,” reads the report.
---
Follow the author on Twitter: @Lyaman_Zeyn