‘Threat’ to future of Russia oil

The surprise fall in Russian oil output in the first part of the year has raised fears about the ability of global supply to keep pace with demand over the next decade.

Blamed on supply problems in western Siberia and weather conditions making it harder to move drilling equipment, the fall contrasts with substantial output rises in recent years.

Analysts at Citigroup recently said annual increases in Russian output could “no longer be taken for granted” but argued that production was expected to rise until 2012.

One energy expert said the Russian industry was now acknowledging a crisis which had been evident to independent observers for several years.

“We now see production peaked last year,” Mikhail Kroutikhin, editor in chief of the Russian Petroleum Investor told the BBC.

“I believe the decline will continue for quite a number of years.”

“Russia is not going to be a very reliable supplier of energy in a few years,” Mr Kroutikhin warned.

BBC