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Russia’s March oil output down to 11.01 million bpd, analysts warn of further declines


© Reuters. Industrial facilities of PCK Raffinerie oil refinery are pictured in Schwedt/Oder, Germany, March 7, 2022. The company receives crude oil from Russia via the ‘Friendship’ pipeline. Picture taken by drone. REUTERS/Hannibal Hanschke

(Reuters) – Russian output of oil and gas condensate fell to 11.01 million barrels per day (bpd) in March from 11.06 million bpd in February, according to Reuters calculations based on an Interfax report on Monday that cited an unnamed source.

A Russian analytical unit affiliated with the Energy Ministry did not publish monthly oil and gas output data on April 2, according to two clients, the first delay in years amid reports of a production decline.

Russia’s oil and gas condensate production was 46.57 million tonnes in March, Interfax news agency said, compared with 42.23 million tonnes in February, which was three days shorter.

Reports of lower production in March, though minor, come as exporters experience difficulties in placing some barrels amid Western sanctions over Moscow’s military operation in Ukraine.

On Friday, sources said that on March 31, the oil output was down to 10.6 million bpd, the lowest daily level since September 2021. It was not immediately clear whether the reduction was a one-off factor or a sign of a more prolonged decline.

At the same time loadings of Russian flagship oil blend, Urals, fell from the Western ports in the Baltic Sea by 5% from the initial schedule last month due to cargo cancellations.

On Monday, citing a source familiar with the data, Interfax news agency said that Russian oil exports outside the ex-Soviet Union increased by 15.8% in annualised terms in the first quarter to 57.1 million tonnes (4.65 million bpd).

It said Russian natural gas output rose 0.8% year on year in March to 67.5 billion cubic metres.

The declines seen in oil production in Russia are related to changes in logistics and financing, Deputy Prime Minister Alexander Novak was quoted as saying on Friday, without providing detail.

As European customers are taking a cautious approach when dealing with Russian oil, analysts expect that Russia may have to cut production this month by between 1 million bpd and 1.5 million bpd.

“I wouldn’t vouch for how fast production will decline. On average (decline) by 1 million bpd looks plausible, but it could eventually be even more,” Alexei Kokin from brokerage Otkritie said about expectations for April.

The energy ministry did not reply to a Reuters request for a comment on possible production cuts this month.

Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.

Russia’s March oil output down to 11.01 million bpd, analysts warn of further declines

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