Page 134 - RusRPTMar23

February 8. “I can say that at the level of December, 9.8–9.9 (million barrels per day), we need to check,” Novak said when asked about oil production levels in January.
Deputy Prime Minister Alexander Novak announced on February 10 that Russia will reduce its oil production by 500,000 b/d in March. The reduction will have an impact on the country's oil output this year. The announcement of the cut was expected, and the oil market responded with a modest oil price rally.
In 2022, Russia's oil production and exports were affected by sanctions after the invasion of Ukraine, but China stepped up its purchases. As a result, Russia's average oil output increased by 1.5% in 2022 compared to the previous year, to 10.7mn b/d, including condensate. Russia's oil exports were up 7.5% in 2022, mainly due to the low base of 2021 when its oil production was still subject to cuts agreed by OPEC+ during the Covid pandemic.
Earlier the same week, the second phase of the EU embargo on Russia came into force, along with a price cap of $100 p/b on seaborne oil product imports of diesel and other expensive oil products. European companies can still provide shipping, insurance, and other services to Russian oil cargoes if the prices are below the cap.
President Putin signed a decree in December in response to these measures. The decree banned Russian oil companies from entering contracts that envisioned selling oil or oil products under the price cap, directly or indirectly. The decree came into effect on February 1 and will be valid for six months.
Novak then stated that Russia would not sell its oil to countries that joined the price cap, resulting in the reduction of oil production by 500,000 - 700,000 b/d. The clarification made Russian companies responsible for checking the destinations of the oil and oil products they sell. The government may find it difficult to enforce compliance with this regulation. It seems that Russia has evaluated the amount of crude and oil products that could be sold to countries that have not joined the cap and decided to reduce oil production accordingly.
Russia was second in crude oil production after the United States in December 2022, the state statistics service Rosstat reported on February 23. Saudi Arabia was third. Russia’s crude oil production was 10.873mn barrels daily in December 2022, while the US lifted 12.087mn barrels per day and Saudi Arabia produced 10.435 barrels per day. The country produced in total 534mn metric tonnes of oil during January - December of the last year, up 2.1% in annual terms. Crude oil production in December had an uptick by 0.1% in annual terms to 46.2mn metric tonnes.
Russia increased natural gas production in January 2023 by 1.6% against the like month of the last year to 52.2bn cubic metres, the Federal State
134 RUSSIA Country Report March 2023 www.intellinews.com