Peak Oil Production in Russia Suggests Worldwide Supplies on the Brink

Russian oil production decreased for the first time in 10 years according to Vedomosti, a Russian newspaper. The decrease was only 0.7%, while exports were reduced more dramatically year over year, down 6.2%.

The fall in Russian production may be a major turning point in worldwide crude oil production. While OPEC nations like top producer Saudi Arabia get the attention of most speculators, it is important to note that Russia is the second largest crude oil producer and exporter in the world. In fact, by itself, Russia almost matches the total exports of the third, fourth and fifth top exporting nations combined (Norway, Iran and the United Arab Emirates).

If Russian oil production has indeed peaked, it leaves the world with only three major exporters that are still supposedly able to continue to increase production: Saudi Arabia, Kuwait and Iraq. Given the massive oil consumption needs of the United States, that leaves America in a particularly vulnerable position at a time when the United States is facing a financial crisis.

Market Rap