MOSCOW (Reuters): Russia’s oil production is forecast to remain stable until 2025, its Deputy Energy Minister Pavel Sorokin said, while Moscow plans reserves in order to make its supplies more resilient.
Russia has decided to cut its crude oil output by 500,000 barrels per day until the end of the year in order to prop up the price of oil, a key contributor to its budget revenues.
Russian oil production has proved resilient in the face of Western sanctions, defying forecasts of a steep decline.
“According to current forecasts, oil production will be at a stable level until 2025,” Sorokin was quoted as saying by Neftegazovaya Vertikal magazine.
Last month, JP Morgan said Russia would be able to maintain its oil output at pre-Ukraine conflict levels due to steady demand from China and India, but it might struggle to reroute some of its oil product exports away from Europe.
Russia has so far managed to reroute oil exports from Europe to India, China and Turkey, which snapped up cheap barrels despite the G7’s $60 price cap on Russian crude.
Speaking about plans to set up oil storage, Sorokin said there are various projects under discussion.
He said such reserves would increase the flexibility of supply, “taking into account the current situation in international markets, high volatility in demand and oil prices.”
Russia does not currently have large oil storage, which would give it more flexibility in production and exports.
Last year, a Russian official said that construction of storage facilities of no less than 100 million tons, or more than 700 million barrels, may take up to four years.