Page 114 - RusRPTNov23

Russia's offline primary oil refining capacity has been revised up by 14% to 4.6mn metric tonnes in October from the previous plan, industry sources said and Reuters calculations showed on Wednesday. This still will be down by around 9% from September. Idle primary oil refining capacity is seen declining by 63% next month to 1.642mn tonnes, according to Reuters calculations. The decline in offline refining capacity usually leads to a decrease in available crude oil volumes and, subsequently, lower exports.
All OPEC+ countries, including Russia, that have declared extra voluntary limits in oil production are fully meeting their obligations, Russian Deputy Prime Minister Alexander Novak said in an interview with Rossiya-24 TV channel following a meeting of the OPEC+ monitoring committee on October 4. "We discussed and confirmed that the agreements that were reached on an additional reduction of 1.7mn barrels per day voluntarily by the countries participating in the agreement are being implemented in full," he said. Novak also stated that Saudi Arabia lowered production by 1mn barrels per day while Russia reduced export oil shipments by 300,000 barrels per day. These measures will remain in effect until the end of the year. OPEC+ members agreed to keep monitor the oil market. "At the next meeting in November we will look at the current situation and, if necessary, we will adjust the relevant decisions," Novak said. Several OPEC+ countries, including Russia and Saudi Arabia, have agreed to reduce oil production by 1.66mn bpd from May 2023 until the end of 2024. Furthermore, Russia and Saudi Arabia affirmed the continuation of additional market-balancing steps. As a result, Saudi Arabia will continue to restrict oil production by 1mn barrels per day through the end of the year. Russia will continue to cut oil supplies by 300,000 barrels per day.
The OPEC+ Joint Ministerial Monitoring Committee meeting on October 4 showed the UAE is getting fed up with the production cuts Oil output quotas were maintained and Saudi Arabia reaffirmed that it will keep its extra voluntary cut until year-end. But the UAE has again laid out aggressive plans to raise output and it may only be able to grit its teeth at OPEC+’s cautious approach for so long.
The meeting came just after Saudi laid out its 2024 draft budget. There has been a stark revision to fiscal policy. Spending estimates for 2023-26 have been raised by an average of 30% since the 2022 Budget. The Ministry of Finance now expects to run budget deficits out to 2026. This is predicated on higher revenues, underpinned by high oil prices. Indeed, the government’s estimates point towards the fiscal breakeven price trending towards $95pb in the coming years and helps to explain why the Kingdom wants to constrict global oil supply.
In contrast, the UAE’s energy minister has said the country wants to raise its
114 RUSSIA Country Report November 2023 www.intellinews.com