Russian oil producers said on Friday that plan to maintain current crude export volumes, despite Russian government plan to cut production of hydrocarbons in March, the Vedomosti newspaper said on Friday, citing sources familiar with the companies’ plans.
The Oil production will decline due to reduced supplies to Russian refinerieswhich in turn will cause a decrease in the export of oil products, according to the newspaper, since Russia plans to cut crude production by 500,000 barrels a day in March.
At the same time, it is unlikely that the volume of crude oil exported abroad will decrease significantlye, the newspaper reported.
The The European Union imposed an embargo on Russian oil products and introduced price caps from February 5in addition to the restrictions imposed on crude oil December for Moscow’s actions in Ukraine.
At the same time, the EU has introduced several exceptions to its maximum price system. In its guidance, the EU stated that the maximum price ceased to apply to Russian oil products when blending operations in a third country “result in a rate change” or changes in the type of oil product.
According to JP Morgan, Brent prices are unlikely to exceed $100 a barrel this year, unless there are “significant geopolitical factors”.
As they added in the note, it is unlikely that the OPEC+, an alliance that includes members of the Organization of the Petroleum Exporting Countries (OPEC) and others such as Russia, defend the minimum price of 80 dollars, so it would not need to cut production quotas this year.
Instead, the group could add 400,000 barrels per day (bpd) to the offerhe added.
Saudi Energy Minister Prince Abdulaziz bin Salman said Thursday that OPEC+’s current deal to cut production targets by 2 million bpd would stand until the end of the year.
JPMorgan analysts noted that since sRussian production is expected to fully recover in June and that the levels of higher prices prevent the United States from buying again to increase its strategic oil reservesthe balance between supply and demand is likely to tighten further.
As a counterpart, according to analysts, China would import a record amount of crude oil in 2023 due to rising fuel demand as people travel more after COVID-19 controls are lifted and as a result of the start-up of new refineries.
The prospect of strong demand from the world’s largest importer of crude will be another bullish factor for an oil market already supported by production cuts by the OPEC+ producer group and Western sanctions on Russian exports.
According to analysts from four industry consultancies -Wood Mackenzie, FGE, Energy Aspects and S&P Global Commodity Insight-, the Chinese crude oil imports could increase by between 500,000 and 1 million barrels per day (bpd) this year, to 11.8 million bpd, reversing the decline of the previous two years and surpassing the 2020 record of 10.8 million bpd.
Their estimates coincide with the latest forecasts from the International Energy Agency (IEA).
Source: Ambito
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