Page 78 - bne IntelliNews Russia OUTLOOK 2025

7.0 Energy and Power
7.1 Oil production and transport
Russian oil export volumes have been remarkably steady over the last 2.5 years, despite sanctions. Thus the price cap has succeeded in keeping Russian oil on the market and preventing supply issues.
According to the KSE, Russian revenues from oil sales under current price restrictions and existing sanctions will reach $141bn in 2025 and $135bn in 2026.
In January-August 2024, oil export earnings averaged $16.9bn vs. $17.3bn in H2 2023 and $14.1bn in H1 2023. Budget revenues from oil were also roughly unchanged compared to H2 2023 but ~75% higher than in H1 2023. Russia’s ability to fund its government and, thus, its war in Ukraine appears largely unconstrained by oil sanctions.
O&G exports are projected to diminish to $231bn in 2024 and further to $208bn in 2025 (vs. $235bn in 2023). As a result, the current account surplus is set to climb to $60bn in 2024 before declining to $47bn in 2025. In terms of its external accounts, this leaves Russia in a relatively comfortable position and will limit ruble depreciation.
Two and a half years after Vladimir Putin invaded Ukraine, provoking successive waves of Western economic sanctions, Russia is pumping about as much oil as ever. That’s the way Washington and other Western governments want it. Russian production has dipped 8% from the prewar month of January 2022, to about 9.8mn barrels per day (bpd), but mostly thanks to compliance with OPEC+ cuts.
OPEC lowers global oil demand growth forecast for 2024. The Organisation at the same time keeps the forecast of oil supply growth from non-OPEC+ countries at the level of 1.2mn bpd in 2024 and 1.1mn bpd in 2025.
Despite sanctions, the size of Russia's shadow fleet has expanded by 70% in 2024. According to KSE analyses, Moscow has increased the volume of its shadow fleet of oil tankers by almost 70% despite restrictions targeting insurers and shipping companies. The volume of Russian oil transported by these poorly maintained and uninsured tankers increased from 2.4mn bpd in June 2023 to 4.1mn bpd in June 2024.
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