Russia’s oil output plunges to LOWEST in nearly a decade

Oil and condensate production in Russia fell for the first time in 12 years and reached nine-year lows in 2020, as one of the major global oil exporters supported the historic OPEC+ deal to boost a pandemic-hit energy market.

Last year Russia pumped 512.68 million tons of crude and condensate, meaning that the production volume decreased 8.6 percent compared to 2019, according to TASS, citing data from the statistical unit of the country’s Energy Ministry, CDU-TEK. Last year’s oil production almost reached the levels of 2010, when it stood at 512.3 million tons. 

The decline followed a record output level in 2019, when the nation’s production reached 568 million tons, and marked the first drop since 2008.

Almost all major Russian oil companies cut oil and condensate output in the last month of the year and for 2020 as a whole. The cuts for the year ranged from six to 12 percent. Russia’s biggest privately owned producer, Novatek, was the only exception in December: it boosted production by around three percent compared to a year ago, but this was still down 0.5 percent on an annual basis. 

The pandemic has brought unforeseen turmoil to energy markets, with oil prices suffering an unprecedented decline, as a standstill in travel and production crippled global demand for the commodity. Apart from the devastating impact of the pandemic, the collapse of the previous OPEC+ agreement became another shock for the market last year. 

In order to stabilize the situation, the Organization of the Petroleum Exporting Countries and allied oil producers led by Russia, together known as OPEC+, inked a new oil deal in April. The parties agreed to historic cuts of 9.7 million barrels per day (bpd), which entered into force in May and were subsequently eased to 7.7 million bpd. 

New production hikes became effective this year, with an additional 500,000 bpd coming to the market in January. OPEC+ is set to hold a meeting on Sunday to decide whether the current cut of 7.2 million bpd could be further eased by another 500,000 bpd. Russia previously said that it would support bolstering the exports.

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