Oil exports by Russia, the biggest non-OPEC producer, will be up almost five percent this year to 253.5 million tons with a “slight” increase projected for next year, according to Deputy Energy Minister Kirill Molodtsov.
“We are speaking about 253.5 million tons this year, which is 4.8 percent higher than in 2015. In 2017, we will have a slight increase. Our capacities allow us to increase exports, but much will depend on the execution of the OPEC deal [to cut production],” Molodtsov said, as quoted by the Interfax news agency.
According to Molodtsov, Russia may cut production by about 4.5-5 million tons next year to meet the global deal to cut output.
OPEC has pledged to cut oil production by 1.2 million barrels per day (bpd) from January 1 in a bid to end oversupply that has halved crude prices since 2014. The cartel’s biggest producer Saudi Arabia plans to slash around 486,000 bpd. Other producers will cut production by 558,000 bpd with Russia contributing a 300,000 bpd cut.
Molodtsov added that oil refining in Russia in 2017 could be reduced by another 2.5 percent to 270 million tons. This could be reached with better oil refining efficiency, and cuts in heavy oil refining, he said.
At the last close on Friday, oil prices saw a slight increase with Brent trading at $55.16 per barrel and WTI at $53.
With oil prices jumping between $27 and $56 this year, the producers’ commitment to the output deal remains crucial. Ahead of 2017, oil price predictions by major companies and banks are hovering in the $50-$60 range. Other forecasts swing from $10 to $90.