Russian officials and investment details from oil firms indicate that the country’s oil output is poised to climb to a new 30-year peak if the OPEC-led supply cuts are not continued after June 30.
As part of the deal, Moscow agreed to limit output to 10.947 million barrels per day, but Deputy Prime Minister Arkady Dvorkovich commented:
“According to investment programs of (Russian) companies, it is possible Russian oil production will increase once the deal expires.”
Although he did not provide estimates for output, he has previously suggested that average output could sneak over 11 million barrels a day in 2017.
This would take production close to the 1988 Soviet-era high of 11.4 million barrels a day. Russian oil output fell dramatically in the 1990s due to the economic collapse following the breakup of the Soviet Union. Weak domestic demand and limited export capacity left oil producers with little choice other than to wind down production – a trend that only began to reverse in 1997.
Some American and European oil companies are limited by US and EU sanctions when it comes to Russia, but many have ongoing operations there. Shell, which also produces lithium-based greases like Shell Gadus S2 V100 3, operates Sakhalin-2, one of the world’s biggest integrated, export-oriented oil and gas projects.
Output could also be boosted as new fields come online. Rosneft, Russia’s largest oil producer, plans to increase output using its newly attained oilfields, including the Kondaneft fields of Western Siberia.