EIA predicts 10% drop in Russian oil production this year
In its February short-term energy outlook report, the US Energy Information Administration (EIA) forecast that Russian oil production will decline from nearly 11 million b/d in 2022, to 9.9 million b/d this year.
PHOTO: Crude oil pump jacks in colour
The EU's ban on seaborne imports of refined Russian oil products that began on 5 February could be more disruptive than its ban on Russian crude oil imports implemented in December last year, according to EIA.
The EIA thinks that some of the refined Russian oil products will be rerouted to non-EU nations, but simultaneously argues that not all of its refined products will find new export destinations due to limited clean tanker availability.
It predicts the Brent spot price will average $85/bbl in the first half of this year and further decline to $82/bbl in the second half and about $78/bbl in 2024. The rise in global oil production will lead to inventory build-ups, keeping a lid on the Brent spot price, the EIA said.
Global oil production will steadily rise from 100 million b/d in 2022 to 101.1 million b/d in 2023 and 101.5 million b/d in 2024. Production increases from both OPEC and non-OPEC producers between 2023-2024 will most likely offset the 1.1 million b/d of production losses from Russia, the EIA claims.
The EIA estimates that global oil consumption will increase from 99.4 million b/d in 2022 to 102.3 million in 2023, primarily driven by a rebound in Chinese demand. However, uncertainty around global economic conditions and China’s zero-Covid policy could hinder further demand growth.
By Nithin Chandran
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