Russian Oil Production Appears to Have Peaked

Russia

More relevant now to the world however is the ability of Russia to export oil. 2008 saw Russian oil exports fall by over 5.00% and the outlook is not pretty from here. The fall in oil prices not only hurt Russia economically. Current prices are simply way too low for great swaths of Russian production to carry on profitably. While GDP per capita is still much lower in Russia than in the OECD, Russia simply does not have the kind of dirt-cheap labor or materials advantage that it enjoyed just 10 years ago. Very few oil producers do. And as a general point, oil at $45.00 continues to set the stage for a supply collapse. Russia is vulnerable to a huge drop in production.

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