Russia’s oil production is showing signs of life after a steep downturn in April. The Kremlin said output rebounded by as much as 300,000 barrels per day in May. “We expect further recovery in June,” said Alexander Novak, Russia’s deputy prime minister. Loading Something is loading.
Russia’s oil production is showing signs of recovery despite widespread shunning of its supplies after President Vladimir Putin ordered the invasion of Ukraine.
Alexander Novak, the Kremlin’s top energy official and deputy prime minister, said output increased by 200,000-300,000 barrels per day in May after declining by 1 million barrels per day in April.
“We expect further recovery in June,” Novak said Thursday at an event in Moscow, according to Bloomberg.
While the European Union has yet to reach an agreement on a phased-in oil embargo in Moscow, major customers stopped buying from Russia on their own. This so-called self-sanctioning by Western companies allowed customers in Asian markets to pick up the slack at discounted rates.
And Russia may have a back door to European markets as well. Novak also said Thursday that Russian oil producers have sent exports to other markets, where they could then be redirected to Europe.
In addition to the recent gains in oil, Russia is continuing to sell natural gas to Europe, even as it looks for alternative supplies.
Novak also said roughly half of state-controlled Gazprom’s foreign customers opened accounts to comply with the country’s demand to pay in rubles.
Despite the short-term advances, Russia’s economy ministry has projected full-year declines in energy output. Production of oil and oil products is expected to fall 9.3% in 2022, and natural gas is seen down 5.6%.
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