Page 140 - RusRPTJul24

from the spring of 2023 to the end of 2025.
9.1.1b Oil sector news
● Production
How do Ukraine's strikes on refineries affect the aggressor's oil refining capacity and budget? In May, the Russian government's subsidies to its gasoline producers increased to ₽202B ($2.5B), and the amount keeps growing. Russian authorities are forced to pay these costs to curb the rise in consumer prices for gasoline. As analysts note, estimates of damage resulting from Ukrainian drone strikes on Russian oil refineries vary widely. The maximum estimate is that 17% of the country's processing capacity has been damaged. Considering the locality of the market, the loss of capacity from plants located in the European part of the Russian Federation that supply fuel to the aggressor's troops could reach 20%. By March 18, oil trader Gunvor Group estimated Russia has lost 600,000 barrels of daily oil refining capacity. JPMorgan estimated this figure at 900,000 barrels. At the end of April, it was reported that oil refining in Russia approached its lowest point in 11 months. Regarding capacity restoration, refinery equipment is mostly made to order, the terms can reach two years, and some installations cost as much as $1B.
Russia’s oil production is expected at 505-515mn tonnes in 2024, Deputy Prime Minister Alexander Novak told reporters on the sidelines of the St. Petersburg International Economic Forum (SPIEF). "I think that [production] will total approximately from 505 to 515mn tonnes, I think closer to 515mn tonnes," he said, adding that more precise figures would be provided at the end of the year.
In May, 12% of the Russian Federation's oil refining capacities were idle.
According to Reuters calculations, 3.39 million metric tons, or 12% of Russia's primary processing capacity, are currently idle. In addition, idle oil refining capacities are expected to decrease by another 41% in June compared to the May level—to 1.94 million tons.
OPEC decided to leave the 2mbpd production cuts in place at a meeting on June 1. Only the UAE was allowed to increase its production.
Oil fluctuated June 3 on OPEC+'s decision to begin lifting voluntary production restrictions in October, but eventually settled at $81 per barrel Brent. Oil ended May with a fall of 7.1%.
On Sunday in Riyadh, the ministers of the participating countries decided: Extend for a quarter the voluntary restrictions of some participating countries
140 RUSSIA Country Report July 2024 www.intellinews.com