Page 113 - RusRPTAug22

9.0 Industry & Sectors 9.1 Sector news
9.1.1a Oil & gas sector results
Oil output in July rose 2% m/m to 10.7mmbpd, crude exports fell by 1.4%, and refinery throughput rose by 4% to 5.66mmbpd, reports Kommersant.
The continued recovery from the lows after the onset of the Ukraine Crisis still leaves Russian oil output 0.8mmbpd below its OPEC+ quota and 2.7% below its February output level of c11mmbpd.
Meanwhile, the new Secretary General of OPEC, Haitham al-Ghais, told Kuwaiti newspaper Alrai that Russia remains a strategic partner in OPEC+ and that its continued participation remains important for the success of the agreement.
Russia, and world oil markets, continue to adapt to the new reality. Analysts say world trade routes will continue to change in response to the mispricing created by European efforts to block the import of Russian oil and refined products into that market.
The much-discussed Urals discount to Brent, which by various sources is currently anywhere from $20-$35/bbl, is a powerful incentive for bargain hunting consuming countries and international oil traders to create ways to get Russian oil and products to market.
The simultaneous decrease in Russian crude exports and, presumably, increase in refined product exports reflects changing profitability of various options available to Russian integrated oil companies, and are likely due to improved shipping arrangements for exporting refined products. The continued discount on Urals, even if significantly smaller than it was just a few months ago, means that refined product exports should generate a larger profit margin.
Analysts expect Russian exports and production to decline again when Europe is scheduled to begin is new embargo on Russian exports of crude (December 5) and refined products (February 5), followed once again by a months-long, and perhaps years-long, recovery in output much as we have seen between February and July
113 RUSSIA Country Report October 2020 www.intellinews.com