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Russian oil production may increase this year, Deputy Prime Minister Alexander Novak said on Thursday, despite Western sanctions over Ukraine, while the country supports OPEC+ deal extension beyond 2022.
He said production of oil and gas condensate is expected at between 520 million tonnes and 525 million tonnes in 2022 after it reached 524 million tonnes in 2021.
Russian oil production has proved resilient and has defied predictions of a steep decline following sweeping restrictions introduced by the West after Moscow sent its troops into Ukraine on Feb. 24.
Russia has managed to boost sales of oil to Asia, notably to India and China.
Oil and gas condensate fell by 11.5% in April from March to just above 10 million bpd but had been on a recovery path since then. In July, it rose to 10.76 million bpd.
“We produce exactly as much as we have the ability to produce and sell. We have a small increase, the situation is improving as you can see. If the situation continues to stabilize, and our companies will find (new) markets with confidence, I think that production will also increase,” Novak told reporters.
Russia still faces more challenges on oil markets, including plans to cap prices for its oil. The European Union will also stop buying all seaborne Russian crude oil from early December and will ban all Russian refined products two months later as part of sanctions efforts.
Novak said that Russian companies are readying for the oil embargo. He also criticised the plans to cap Russian oil prices by the global leading economies.
“In my opinion, this is utterly absurd. And this is an interference in the market mechanisms of such an important industry as oil,” he said.
Commenting on the future of the OPEC+ deal between global leading oil producers, which was initially struck in 2016 and which expires this year, Novak said the Russian oil companies support the extension.
“Cooperation, which was agreed in 2016, has shown its effectiveness in various situations. We have very successfully passed the crisis, the period of the 2020 pandemic, so my point of view is that we need to continue such cooperation,” he said.
“We discussed this with our oil companies, and they also support it.”
