Media: Russia’s oil production hits annual record

Russian energy companies in February increased average production of crude oil and gas condensate by almost 2 percent month-on-month to 1.508 million tons per day. This was reported by the Russian newspaper Kommersant on Tuesday, citing people with knowledge. According to the media report, the industry has reached the production level of February last year, one year after extensive sanctions were imposed on Russia, and could even exceed it.

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Since March of last year, Russian oil production has fallen sharply due to the Ukraine conflict, sanctions and the refusal of many Western customers to buy Russian crude. Despite the bans and price caps, Russian oil production and exports have held up much better than expected in recent months, according to the International Energy Agency (IEA). This is because Moscow has managed to divert much of the crude oil previously shipped to the EU to new markets in Asia.

China, India and Turkey in particular have increased their purchases to partially offset the drop in Russian exports to the EU, the agency said. In addition, the EU and G-7 price caps may have contributed to higher Russian exports as Moscow has been forced to sell its Urals oil at a lower price to cap-compliant countries. That could potentially make Russian resources cheaper than crude oil from other sources.

The EU and the G-7 have imposed a price cap on Russian petroleum products, set at $100 a barrel for diesel, kerosene and gasoline, and $45 a barrel for other petroleum products trading below the price of crude oil. For exports priced above these ceilings, companies from western countries are not allowed to provide insurance and transport services.

more on the subject – Bloomberg: Russia has been selling oil well above the price ceiling for weeks