Russia Cuts Its Oil Production

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Russia Cuts Its Oil Production

Commerzbank Warns About Russian Oil Cuts

report from multiple industry sources shows that Russia will have to reduce its oil production. This has to do with the ongoing Russia-Ukraine situation and how it is now also engulfing the oil production.

Several of Russia's oil refineries are either stopped or have encountered damage. As a result, we can expect a decrease in the export of processed oil from Russia. However, this could mean Russia can now export more unprocessed oil to other countries.

Russian Oil Exports Decline

But the bottom line is that the oil exports from Russia have gone down, according to Commerzbank. The available data shows a sharp decline in the weekly oil exports from Russia.

In September, the oil exports from Russia had reached almost 4.1 million barrels a day, but that has now gone down to just 933,000 barrels a day. No matter how we look at it, that's a big reduction and shows that Russia's oil machinery is really struggling now.

Earlier, Russia was routing a lot of its oil shipments through the Baltic Sea port of Primorsk. But it's no longer safe, and now the Russian authorities would have to handle the oil shipments from other parts.

According to sources, Russia will have to use the ports of Novorossiysk on the Black Sea and the famous Ust-Luga on the Baltic Sea.

It's also worth noting that the oil exports of Russia to India and China have also gone down. So, it seems that the tariffs imposed on India have already started to show their effects on the Russian exports.

But what happens if Russia can't sell the same amount of oil to China and India? In that case, Russia would have to either find new buyers or lower its production to balance the markets.

One way or another, it seems that the Russian oil production is expected to decline in the coming months.

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